The British Government's budget attitude towards Entrepreneurialsm

This post was sparked by the latest Budget. The "2p off the 22p tax rate" headlines were fairly rapidly followed up with the realisation that the 10p tax band was gone in the small print.

(Imagine if we treated our customers that way - you'd never come back! The problem, of course, is no competition - I can't buy another Government without emigration as things stand. Maybe the EU could arrange for an Clear Skies and Government policy - can I buy my Government services from, oh, Holland from now on

Anyway, what was less well noted is that although Corporation tax has gone down from 33p to 30p (not enough of course, grumble the Big Guys), the rate of tax for small business is going up, from 19p to 22p!

Apparently, the worry is that all those Corporates may disappear from our shores if they don't get lower tax rates, so the trick is clearly to tax it off smaller companies who are less likely (ie able) to pack up and go.

This, of course is just the latest in a continual drip of extra operating costs onto small companies over the last few years. Employment law, Health and Safety, restrictions in what can be expensed and a host of other small regulations make it harder and harder to run a small business as a lean operation, you wind up with a proportionally similar Admin load as a Corporation the minute you have your first employee. And if you have an office in another country.....

The Game Theory of all this has always struck me as odd. Starting a business is very risky, the casualty rates are very high, there is a defined Entrepreneur's Discount. And yet - we are told - entrepreneurs are the lifeblood of our future competitiveness. So you would have thought that the higher risk would have meant the UK's start-up policy was structured for rewarding people with breaks, not breaking them?

You can get grants to start up in the UK, typically in economically unfortunate areas, but they are confusing, very time consuming to apply for, and at the end of the day typically fairly small. There are organisations to help startups, but they are typically under-resourced, often at cross purposes, if not contradictory ones.

If one was a tad cynical one would suspect that in fact UKGov was actually trying to prevent entrepreneurialism

Countries like Ireland have cottoned on to this, looking at attracting Immigrant Entrepreneurs. They already give their Tech entrepreneurs some amazing perks to start up - zero/low tax, government assistance grants in places people actually want to live, and even paying some of their salaries as they set up. Other Eastern EU countries have low corporate taxes, and a far more helpful view towards what can be claimed as business expenses....an interesting thought given how many top class IT developers are in these countries. And of course Silicon Valley always beckons.

Think about this policy from an Entrepreneur's point of view......why not be entrepreneurial about where to set up, never mind what to set up?

In today's climate there is as much choice of where to start a business as there is about where to move Big Co's HQ. We know that less capital is required, and geography is less of an issue for Web service based businesses, and a flight to Europe can cost less than a train trip from Reading to London. People like Skype have already shown that location in key centres is not as critical as it once was.

So, will we see UK entrepreneurs joining the supposed exodus of the Big Co's and setting up elsewhere, I wonder (apart from the Silicon Valley Shuttle I mean)?

They do great coffee in Bratislava and Budapest after all...............and in Ireland its not the coffee

Slainte!