Economic and Political Landscapes Influence on Business Structure
|✓ Paper Type: Free Assignment||✓ Study Level: University / Undergraduate|
|✓ Wordcount: 7621 words||✓ Published: 23rd Jun 2021|
PATMOS scientific laboratory intends to start up a business to trade in sale of chemicals for various uses in manufacturing industries, agriculture and health institutions and further intends to grow to sale of equipment’s and apparatus to aid in scientific research and expand to setting up its own research laboratory. The choice of the right classification of business establishment and its management is one of the most striking task of PATMOS scientific laboratory to select from. Once the form of structural system is chosen, it is costly and difficult to switch over to another model of business vehicle immediately, because it makes the organisation drop focus, strategy and customers of which is a waste of time, effort and money. Therefore, the structure of a business must be chosen after careful thought and consideration of the different type of business vehicles available. There are several aspects of consideration while choosing an appropriate form of business organisation. Influences which are inter-related and inter-dependent as well as well thought questions to be asked here are; ‘How do PATMOS scientific laboratory intend to get funding for the new business? How much tax will the business save by setting up a Limited company vs. being a sole trader? What are the statutory and legal requirements once it is set up as a Limited company? Is there a renewal cost annually? What will be the marketing strategy for the product, how will the human resources or personnel be managed and how will the knowledge management be strategized (companies made simple, 2018)
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Understanding the economic and political trends in the UK is key in understanding the influences that will affect this start-up business. It is important that the founding managers of PATMOS understand the economic factors which increase or decrease demand for easy planning. number of direct and indirect influences that could affect this demand including wealth of the people or the nation, inflation, expectations, interest rates, various taxes and tax regimes and government expenditures.
Consumer price inflation statistics is used by economists and analysts as a macroeconomic indicator (ONS, Users and uses of consumer price inflation statistics, 2018). These statistics can be used for enlightening decisions on economic and government policy. Government departments use consumer price statistics to monitor how prices for specific goods or services compare with general levels of inflation.
The RPI is used to compute the indexation payment for the effects of inflation when calculating the chargeable gains of companies or organisations (ONS, UK Labour Market: Estimates of employment, unemployment, economic inactivity and other employment-related statistics for the UK. , 2018)
Statistic shows that the forecasted Retail Price Index (RPI) inflation in the United Kingdom (UK) from the first quarter of 2017 to the first quarter of 2023 inflation is expected to rise every other quarter throughout 2017 to a peak of 4.1 percent in the fourth quarter of 2017 (Statista, 2018). After This the Retail Price Index is expected to experience a quarterly decrease before increasing again in fourth quarter of 2019, it is expected to continue to increase until the first quarter of 2023 as shown in chart1
Chart1: Retail Price Index (RPI) inflation in the United Kingdom (UK)
These economic indicators should be in the forefront knowledge of the proprietor of PATMOS regardless of the choice of the business vehicle.
In the last five decades, the manufacture of chemicals showed a stable fluctuation in its time series
Chart2: manufacture of chemicals time series (ONS, CE: Manufacturing (index), 2018)
Effects of Brexit on GDP might not have been immediate, the June 2016 referendum has impacted on the pound’s exchange rate and thus the terms of trade of the UK (FrancescoPapadia, 2018). The effective exchange rate depreciation is 13%. This loss in the terms of trade was thus more than half of what had followed the 1973-1974 oil shock in terms of trade deterioration: “British voters caused more than half of the damage imparted by sheiks”
In the recent Inflation Reports and MPC minutes, the MPC has expected that inflation would rise over the course of 2017, peaking above 3.0%. Consistent with that expectation, twelve-month CPI inflation reached 3.1% in November,1.1 percentage points above the 2% target. Since then, on 16 January, the Office for National Statistics has released data showing that CPI inflation fell to 3.0% in December. (Morgan, 2018)
Inflation remains almost entirely because of higher import prices that resulted from the depreciation of sterling following the vote to leave the European Union. Sterling’s effective exchange rate is currently around 16% below its level in late 2015. This largely reflects the judgements of financial market participants about the likely impact of Brexit on the United Kingdom’s relative economic prospects (Morgan, 2018) This is evident in other asset prices such as UK-focused equity prices, which have significantly underperformed international indices (Morgan, 2018)
8 February 2018 the depreciation of sterling has raised the cost of imports, with sterling non-energy import prices rising by 10% between 2015 Q4 and 2017 Q3. As companies have passed on those higher costs, CPI inflation has also picked up (Morgan, 2018)
Figure 1: CPIH, OOH component and CPI 12-month rates for the last 10 years: October 2008 to October 2018
The UK’s core marketplaces in chemicals remain Europe and the US. Despite Asia’s robust development, fewer than 3% of UK’s exports of organic chemicals went to China in 2016.
Table1:Top Markets for UK Producers, Organic Chemicals, 2016 (MARKIT, 2018)
|US||$2.5 billion||Switzerland||$589 million|
|Germany||$1.4 billion||Poland||$232 million|
|Netherlands||$1.2 billion||China||$268 million|
|Belgium||$1.1 billion||Brazil||$156 million|
|France||$604 million||Spain||$183 million|
The dependence on Europe is extra marked for specialty chemicals, a higher margin and more high-tech category which includes insecticides, paint coatings and refractory cement ingredients (MARKIT, 2018) where PATMOS company management will have to tap into.
Table2:Importation Market for top UK producers, Miscellaneous Chemical Products, 2016
|Germany.||$871 million.||Pakistan.||$29 million.|
|US.||$688 million.||Ireland.||$329 million.|
|Netherlands.||$373 million.||Italy.||$243 million.|
|France.||$433 million.||China.||$252 million.|
|Belgium.||$314 million.||Czech. Republic||$103 million.|
If the UK chemical industry’s’ worst Brexit doubts occur, then what for UK-based chemicals manufacturers? Industry key insiders will point to the United State, another multi trillion dollar market, which takes little tariffs on chemicals, typically between 0 to 6.5%. As GTA data demonstrate, UK exports to the US have varied with oil prices, currencies and other factors, representing there’s potential to grow (MARKIT, 2018)
Table3: UK Organic Chemical Exports to US (MARKIT, 2018)
Amongst all the misperception, entirely UK chemicals sector can do now is watch, wait and lobby. This means that trading in chemicals will not be stopped because of Brexit But whatsoever occurs with Europe, it is possible that EU and US trade in chemicals will remain to offer chance for manufacturers, shipping and logistics businesses, particularly given the shale gas revolution in Pennsylvania, Texas and other states, and its abundant supply of discounted energy, a key input for the chemicals trade segment (MARKIT, 2018)
Understanding the economic factors and the internal and external trading environment before a choice of trading vehicle is very important for PATMOS start-up. However, there are many model structures that need to be discussed out when setting up an innovative business. The main vehicles for start-up businesses embrace: Sole Proprietorship, Partnership company, Private Limited Company(PLC), Public Limited Company, Limited Liability Partnership(LLP) (STARTUPS. , 2018) among others like forming charity or non-profit organisations and NGOs.
It is simple to set up as a Sole Proprietorship, this means that the founder(s) of PATMOS scientific laboratory will have to register the business in his names and all documentations will be in his names, he will normally be accountable for the business’s debts. He or she will also have some accounting tasks. The owner of PATMOS will have to pay Class 2 & 4 National Insurance and Income Tax on the taxable returns of the business, or share of profits, if there is partnership. According to the government, Class 2 NI may be abolished from 6 April 2019 (GOV.UK, 2017)
When PATMOS opts for creation of a limited company, it means that its funds are isolated from personal moneys, nevertheless, there are more writing and administration responsibilities. Nearly people get assistance from expert, for example an accountant, but the owner(s) can set up the business him or herself. In a partnership, you and your partner (or partners) generally portion duty for your company. This includes; all losses your business makes, bills for items you buy for your company, like stock or apparatus. Partners share the business’s incomes, and separate partner pays tax on their share. A partner does not have to be an authentic person. For example, limited company amounts as a ‘legal person’ and can also be a partner. You then need to roll the partnership for Self-Assessment with HM-Revenue and Customs(HMRC) if you remain the ‘nominated partner’. This means you are answerable for transferring the partnership tax-returns(Set up a business partnership , 2018). Founder of a business start-up should not confuse Limited Partnership with a Limited Liability Partnership; a Limited Partnership have two sorts of partners: general partner and limited partner (BIS, 2011). The system is like a Partnership, with the main difference being that the limited partners may not be involved in the management of the business and their liability is limited to the amount that they have invested in the partnership (BIS, 2011). PATMOS proprietor should note that limited partners are different from ‘sleeping’ partners in a Partnership or Limited Partnership, who does not take part in running the business but remain fully answerable for its debts. Limited partnerships must register at Companies House and does not come into existence until they are registered. Vicissitudes to the partnership must also be registered (BIS, 2011)
In a corporation there are several avenues to raise capital. They can sell shares of stock and create new categories of stock, such as preferred stock, with different voting or profit characteristics. Partnership though has difficulty in raising additional capital, it’s easier than sole proprietorship, that is because, sole proprietorships are the only owner, therefore can’t sell any shares to fund business growth, and banks are more sceptical about lending money to sole proprietorships (startups, 2018)
Being a scientific business start-up, with small capital to be invested at the initial stages, it would be better for PATMOS to opt as a sole trader or private limited company because of the criteria and conditions for ease of starting and registering the business
Founders of PATMOS scientific laboratory business therefore, need to understand the various regimes and models’ structures to select from before starting to register the business and kick start its operations. This is to avoid cataclysm and expenses in future (STARTUPS. , 2018, p. b)
In lieu of the above various model structures, this assignment paper shall judgmentally compare the various legal, economic, technological and decision-making aspects of a sole Proprietorshipand a privatelimited liability company in which PATMOS scientific laboratory will choose its operating structure from.
The table 4 below summarises the tax and legal aspects of a sole proprietor and private limited liability company into detail and examine how the operations of these two business vehicles selected can fare for PATMOS scientific laboratory
Table 4 comparison for a trading business.(Sole trader v. limited company: key tax & legal differences, 2018)
Guideline to scrutinise the key differences amid a business run by a sole proprietor or as a partnership and a business, run by its director or shareholder.
These contrasts are for a trading business. Various points summarised here are not relevant if you want to compare individuals or companies managing investment businesses.
Running a business needs money and capital. The founder(s) of PATMOS scientific laboratory should take a thoughtful move to understand the investment and working capital finance system for this start-up and fast-growing business. Available options for a sole trader or limited liability company would be in personal savings, short term loans and overdrafts, grants, equity funding, sales factoring and future options would be trade credits and extending to attracting investments from business angels and venture capital. Prospective business founders are generally advised to develop formal plans of their proposed ventures. Consistent with this advice, some scholars have suggested that the high mortality of new small businesses could be reduced through greater pre-start up planning (Castrogiovanni, 1996) However, there is an emerging view that the value of planning is context-dependent (Castrogiovanni, 1996)
PATMOS would utilize short term loans of up to £10,000 to £150,000 like BCRS Business Loans. This is Loans meant to help small and medium sized industries progress and grow(GOV.UK, 2017) If the loan is borrowed from diverse lenders, a debt consolidation loan would help take control of the business finances and keep track of the company money. PATMOS would apply to Barclays bank for such a loan system (BARCLAYS:PLC[GB], 2018) however, the management of PATMOS should note that Loans are issue to status, Premature payment fees spread over and a 5.5% APR Typical on loans of £ 7,500 – £ 15,000 for 2-5 years means rate might vary (BARCLAYS:PLC[GB], 2018). With proper adherence to these terms, the risks of noncompliance will be avoided
An overdraft is another form of funding the start up for PATMOS scientific laboratory would opt for. This is for a short-term borrowing, so there is a less risk and less cost. Arranged overdrafts of over £15,000 has a format fee of 1.5% of the decided overdraft limit, and a renewal payment of 1.5% of the limit would also be applied yearly. These subscriptions are in calculation to the day to day overdraft dues (BARCLAYS:PLC[GB], 2018). The management of PATMOS should note that the decided overdraft has a payment free amount and if you go over that total, daily fees would be charged on the entire balance of the decided overdraft (BARCLAYS:PLC[GB], 2018). Bank over drafts are suitable for sole trader or private limited company because there are no stringent terms and conditions on how to access the money
Acquiring Trade credits is one of the convenient ways to finance the business operations of PATMOS scientific laboratory. This would be an arrangement to advance goods or services on justification of not making immediate cash or check payment. It is a vital means for funding progress since suppliers let you purchase and payment is made later. Unlike in short term loan, there is need for improved relationship with the suppliers as well as customers and there is more writing as to payment of specific amount in a specific time. This arrangement of financing PATMOS business would be very ideal for supply of industrial chemicals and laboratory equipments as this are high-tech items that requires adequate capital
Supplier finance can be an option where the Main customer of the business offers finance to allow the delivery of the services or goods. This is best for a small business operation like PATMOS marketing to big corporations. PATMOS would receive imbursement earlier than normal terms but with a discount. This option would be suitable for a limited liability company.
Invoice financing or releasing cash against your assets could help PATMOS to improve business cashflow and give the growing business a quick source of capital –however, there is need to be fully aware of the risks and potential complications before committing to apply for this way of raising funds for the business. Budding Businesses has guidance and information about invoice discounting, invoice factoring and asset finance to assist in making up decisions (startups, 2018)
As PATMOS business grows, there is need to apply and attract venture capitalist or business angels to finance the business. Usually this starts in the initial business start-up or buy off. The prerequisite for this business angels or venture capital is strict and is suitable for limited liability company since venture capitalists look for equity state in the company. they look for highly motivated individuals who has robust management team employees with decent strategy and plan for the business (Start-ups, 2018). Business angels, either on their own or as part of an angel network or syndicate, offer business funding in return for equity, but can too provide valuable knowledge and guidance to a growing business. this delivers insight into securing angel investment (Start-ups, 2018)
Planning, controlling, organising and influencing are the four basic functions of management that brand administration process in any business set up. Management is therefore, the process of reaching organizational goals by working with and through people and other structural resources available.
PATMOS scientific laboratory, as any other business organisation, has several variables that need to be managed. Some of these variables that need management strategy include the human resources, which is dealt with in the setting up of the organisation structure that is illustrated in chart5 which encourages open communication and building teams this form of structure is organic with Decentralised structure and Collaborative team work with Empowered roles and the strategy here takes a Horizontal communications system with Few rules where communication can be informal. This type of structure is suitable for small start-ups and is suitable to the two chosen business vehicles.
- It is a process or series of continuing and related activities.
- It involves and concentrates on reaching organizational goals.
- It reaches these goals by working with and through people and other organizational resources.
The 4 basic management functions that make up the management process are described in the following sections:
PLANNING: Planning involves choosing tasks that must be performed to attain organizational goals, outlining how the tasks must be performed, and indicating when they should be performed.
Chart5: Organisation Management Structure for PATMOS Scientific Laboratory
Sales and marketing strategy
Small start-ups are usually strapped for cash and thus must observe to the maxim: ‘marketing is an investment of limited size in one area, resulting in measurable higher income in another area’ (Mellor, 2009). Marketing is about meeting needs of diverse stakeholders including buyers, sellers, investors, community residents and citizens of any nation. Nobody really wants what you sell to them, but their problems solved, therefore understanding what the problems of your clients are, then you will easily market to them your products and services(Lynda.com, 2018) The founders of PATMOS scientific laboratory should find out what problems the clients need to be solved and this shall be documented as one of the strategy for the business
The marketing strategy that would be adopted by PATMOS scientific laboratory would be business to business (B2B) since the number of customer would be few with, several buying influences, group decisions, professional purchasing and the Buyer-seller relationship will be a close relationship after sales. The products and service offered will be technical and complex. The prices will be high unit price with low volume and the adopted promotions will be on personal selling as well as push plan that calls for use of the sales strength and trade promotions to push a product through the channels. The marketing team will strategically do public relations by lobbying and press releases as well as do direct marketing through telemarketing, direct mail, online marketing and catalogues marketing. Organic Word of mouth (WoM) will be concurrently used in the promotion activity through offline and online tweets, individually or to groups or can be through a form of overhead conversations. The organic WoM is considered more credible because it lacks commercial bias. This kind of strategy would be considered after researching out the buyers’ behaviours (B2B) category. The buyers include the users who uses the product or service, the influencers who define specifications and provides the information for evaluating alternatives, the buyers who provide funds to purchase the service or product, decision makers who give the final approval and the gatekeepers who control the flow of information.
Figure:3 The Client 4Cs Strategy for PATMOS scientific laboratory
The customer is valued to the business and customer problems need to be catered for at all time. PATMOS business is technical dealing in scientific services and need devotion since the business is fragile, the marketing strategy would start with the Client Viewpoint (4C) showed in Figure 3. The client perspective is important to guarantee allegiance, retain customers and gaining success. Communication is important in buyer-seller relationships in fact, a lot of reputation is now given to Customer Relationship Management (Figure 3). Managers of a limited company should ensure a good Customer Relationship Management system is set up than for a sole trader since a limited company will most likely have a greater client database and perhaps a superior staff. Creating a decent response system is vital nevertheless will also target costs. The Marketing analysis might then emphases on the creativity perspective that is the 7Ps of the marketing mix which are process, product, place, price, promotion, people and lastly physical evidence.
In setting up prices, the sales team of PATMOS scientific laboratory should research out the prices of existing similar commodities in the UK market and how this organisation set their prices. This strategy of finding out prices of other items in the market enable PATMOS to set out competitive prices
The chart below shows how companies in UK set out their prices and how they eventually change them in regard to the changing environment of doing business.
Labour and Human Resources Issues
In UK, for May 2018, there were 8,000 working days lost from 14 stoppages of which 3,000 people took strike action while for the 12 months ending May 2018, there were 357,000 working days lost from 79 stoppages and 37,000 people took strike action. 345,000 working days were lost in the private sector and 12,000 working days lost in the public sector, the lowest figure since records for public and private sector strikes began in 1996 (ONS, 2018)
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Form the above statistical figures, the HR department of PATMOS Company should take a systematic approach to assess the need and recruit the best people that can be motivated and retained for a long period of time taking consideration that this is a start-up and there will be changing roles as the business grows. A Preparation of Job description and Personnel Specification that Attract suitable candidates, for the start-up and assess candidates, make selection decisions carry out Induction and Evaluation (follow up) to have the right candidates trained and retained in the long running of the business.
A 7-point strategic plan should be drawn from; Physical Make-up, Attainments (e.g. Educational, Professional, Work Experience) to General Intelligence, Special Aptitudes (e.g. verbal, numerical, spatial) and Interests, Personality Characteristics, Circumstances, Performance management, rewards and motivation.
Performance management that involves integration and objective setting, Appraisal and performance review, Pay and bonus determination, Individual performance improvement, Career development and training of individual staffs according to their roles. Understanding motivation is a key factor, therefore the HR department should acquaint themselves with the current pay and labour laws for the UK. Chart below shows the monthly wages and salaries survey for UK
From the chart, it shows that the regular pay is commensurate to the bonuses an employee earns. It will be a motivating factor when an employee’s regular pay including bonuses is proportional to the total pay including the bonuses he or she gets.
Therefore, the HR department need to understand the UK labour market in order to draw a remuneration and benefits that attract, motivate, retain and encourage behaviour in line with the changing objectives of the PATMOS organisation time to time and should use Herzberg motivation theory of HYGIENE FACTORS & MOTIVATORS, and Maslow’s theory of hierarchy of needs. The needs of individual staffs should be evaluated from time to time as they age, their needs also change, and this should be taken into consideration in order to retain the best trained staffs.
Table5: UK labour market statistics for March to May 2018, seasonally adjusted
The performance management of PATMOS shall use the Balanced Scorecard, Global initiative & implementation (GII), (GII, 2018) and Top-level support, where Individual objectives will relate directly to organisation strategy & objectives and should reflect to the changing role of the manager.
PLAN THE RELEVANT KNOWLEDGE MANAGEMENT
Managing knowledge is a critical capability for small to medium‐sized enterprises (SMEs) to master because it helps them leverage their most critical resource. Organizational knowledge is the most salient resource at the disposal of SMEs in terms of availability, access, and depth. Successful SMEs are those who can leverage their knowledge in an effective and efficient manner, so as to make up for deficiencies in traditional resources, like land, labour, and capital (Desouza, 2006) According to F. Tunc Bozbura, (2007) Turkish SMEs do not like to share knowledge even within the company. The managers are afraid of losing the control of knowledge. However, since they close the information channels, they also prevent the incoming knowledge (Bozbura, 2007)
Scarborough, Swan and Preston (OECD, 2003) deﬁne knowledge management as follows: “Knowledge management (KM) covers any intentional and systematic process or practice of acquiring, capturing, sharing and using productive knowledge, wherever it resides, to enhance learning and performance in organizations.” KM is a matter of using a category of practices which are difﬁcult to observe and manipulate and sometimes are even unknown to those who possess them (OECD, 2003). With digital revolution in social media, knowledge sharing has been simplified. The IT department of PATMOS takes forefront in coordinating and networking other departments and designing or procuring appropriate software for the various units in the company. the HR department will liaise with the IT department to identify and train key staffs in sales, accounts, marketing in managing the information.
The information management cycle for PATMOS scientific laboratory starts from its creation, storage, authentication, retrieval, using the information, controlling, amending, archiving and its disposal. At each stage of the information cycle, there are designated staffs who will have an impact on the information generated or the information have an impact on them. For successful management of this information, PATMOS adopts the Anthony’s triangle model of planning and analysing the information and the knowledge in it.
Chart6: Anthony’s triangle adopted from R. Anthony planning and control: A frame work for analysis Harvard University press Cambridge MA 1965
The information management model of PATMOS scientific laboratory would depict one in the chart 6. The management will use the Anthony’s triangle model of information management. Managers would allow all the teams to generate the basic data about what is happening in the business, and document records on staff performance and appraisals, staff attendance, annual leave, pay roll, training requirements of the staff sales and marketing performances, procurement and disposal equipments inventory, and as well managing website and digital advertisement. and data processing will be as broad as possible and will take the base of the pyramid.
The information generated will be processed and information management will be by few middle team managers while the knowledge sharing will be first by few top management to keep secret of the company while the other team staffs will be communicated the information in periodical meetings and briefings by their line managers. Generated information shall be kept in soft copies either in computer system or to the cloud and backed up with few important hard copies. A proper filling system would be set up allowing the obsolete data to be disposed.
LEGAL IMPLICATIONS FOR STARTING THE SELECTED BUSINESS START-UPS
Understanding business cyphers, practices, rules and guidelines when opening a new business company is important because it makes you avoid any legal distress in the future from health and safety in business to employee laws and software licensing, (START-UPS, 2018) the founder of PATMOS should ensure meeting all the necessary legal requirements in the small business.
For both business vehicles, it is important that the business has satisfactory protection cover for certain risks. Though this could be understood as an additional load in relations to cost, this is important particularly in the initial phases of start-up where business proprietors have more to lose. The Protection Insurance, though not a lawful obligationfor a sole trader, is a viable and individual protection venture. The other systems of insurance that could be appropriate to the business are the third-Party Liability and the Employer’s Liability Insurance. A Limited Company is lawfully bound to offer Employer’s Liability Insurance for any employee, plus those that labour on a part-time or temporary basis (Bytestart, 2018)
It is suitable for PATMOS scientific laboratory to register as a sole trader at the beginning because Regulation for the Sole Trader is minimal: there is no requirement for a formal constitution for the business, and no need to register or file accounts and returns with Companies House. Sole Traders are treated as self-employed by HMRC and must register and make an annual self-assessment tax return – profits from the business are treated as personal income subject to income tax and national insurance contributions (BIS, 2011)
However, If PATMOS requires to register as a limited liability partner in future as the business grows, the Limited Company is the most common legal form in use for running a business (BIS, 2011). Companies are ‘incorporated’ to form an entity with a separate legal personality. This means that the organisation can do business and enter into contracts in its own name. On incorporation under the Companies Act 2006, a company is required to hold two constitutional documents (BIS, 2011) a Memorandum, which records the fact that the initial members (the subscribers) wish to form a company and agree to become its members. The Memorandum cannot be amended; and Articles of Association – often just referred to as the Articles – which are essentially a contract between the company and its members, setting the legally binding rules for the company, including the framework for decisions, ownership and control (BIS, 2011) The Companies Act 2006 provides significant flexibility to draw up articles to suit the specific needs of the company, provided it acts within the law (BIS, 2011)
There are some important changes in UK employment laws that small business proprietors like PATMOS with staffs need to be conscious of, and an extra change that are probable to occur.
The different changes includes; Pension auto-enrolment where 2017 was a year when many smaller businesses started auto-enrolment staging date coming in, that is the date by which they needed to have a pension set up for employees (START-UPS, The Business Owner’s Auto-Enrolment Handbook, 2018)
It’s worth noting that the government has delayed some of the increases in employer contributions that it had originally planned so this means that the 2% minimum was due in April 2018, and the 3% minimum is due to begin in April 2019 (START-UPS, The Business Owner’s Auto-Enrolment Handbook, 2018)
There is also changes to statutory pay from April 2017 which means that if you need to make payments to staff who are having children, the statutory rates of pay for maternity, paternity, shared parental leave and adoption were increased in April 2017, as is the rate of statutory sick pay. This was the first time these rates were risen since April 2015 (START-UPS, Legal issues & red tape, 2018). This implies that if PATMOS business start-up is to employ personal, it should take that legal implications into consideration.
With effect from the beginning of the tax year of April 2017, harmonised rate for Statutory Maternity Pay, Statutory Paternity Pay, Statutory Shared Parental Pay and Statutory Adoption Pay were improved by £1.40 per week, to £140.98 per week. These rates will be reduced to 90% of an employee’s earnings if this is lower than the statutory rate (START-UPS, Legal issues & red tape, 2018).
In addition, the rate of Statutory Sick Pay, which has also been the same since April 2015, will be increased from the beginning of April from £88.45 per week to £89.35 per week. To be entitled to these statutory payments, your employee’s average earnings must be equal to or more than the lower earnings limit. The weekly lower earnings limit is increasing at the same time from £112 to £113 per week (START-UPS, Legal issues & red tape, 2018).
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This paper work is my own student’s assignment submitted for summative assessment for module CH1700 Business in practice where the information put in here comes from the teaching notes, web sites, journals and some few text books. The name of the company “PATMOS” is a fictional name which is an idea for the name PAT and MOSES. These fictional ideas are intended to materialise into true business ideas where the identified business will be to deal in supply of laboratory chemicals. The citations in this piece of work originates from various sources where some of the information and regulations from these sources are deemed to change or if a slightly different explanation is given in this work, the original text from the cited source will be taken to be the correct statement.
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