In response to the Business and Trade Committee Inquiry into the government’s Small Business Strategy, Brunel academics submitted 2 pieces of evidence relating to (1) challenges facing family-run businesses and (2) how the tax regime and reporting requirements affect small businesses.
Dr Siming Liu (Brunel University of London) and Prof Len Skerratt (Manchester University) addressed the question on “assessment of the current overall tax regime, including reporting requirements, for SMEs, and how could it be improved”, with evidence summarised as:
- Simplified reporting standards work well for micro and small businesses, with these firms maintaining good earnings quality and reliable financial data under frameworks like FRS 105 and FRS 102 (small).
- A gap exists between simplified reporting rules and lenders’ practices, as many banks still demand full financial accounts from micro and small firms, undermining the purpose of regulatory relief and adding costs.
- Medium and larger private companies often produce lower-quality financial reports, filing abridged or minimal accounts that limit transparency and reduce the reliability of financial forecasts, which can harm stakeholders, including SMEs trading with them.
- Recommendations include retaining simplified reporting for micro and small firms while ensuring lenders accept simplified accounts where legally valid, to avoid unnecessary compliance costs for SMEs.
- Phase out abridged accounts and require minimum disclosures for medium-sized and larger private companies, particularly on cash flow and debt, to improve transparency and protect the wider business environment that SMEs depend on.
See their full evidence submission here
Dr Kiran Kandade, Dr Nan Jiang (both Brunel University of London) and Mr Paul Andrews (Family Business United) addresses the question “Do family-run businesses face any specific challenges, including ‘red tape’, and what support do they require to meet these challenges?”. Their evidence can be summarised as follows:
- Family-run businesses are a cornerstone of the UK economy, yet they face distinct structural and operational challenges that require targeted policy attention to unlock their full potential.
- Succession Planning remains the most pressing and persistent challenge for family businesses, with a significant proportion lacking formal succession plans. Policy interventions can play a critical role in providing guidance, incentives, and tools to support orderly and sustainable succession. Generation gaps between founders and successors often exacerbate the challenges of succession planning. Advisory support that bridges the relational and cultural divides between generations is essential for effective intergenerational transition.
- Recruiting and retaining skilled, senior, and niche non-family talent, given that such talent may not be available within the family as the firm grows, poses a significant challenge for many family businesses. Policy support for employer branding, skills pipelines, and innovative retention frameworks could strengthen family businesses’ ability to attract and retain the talent they need to thrive.
- Family firms often lack targeted advisory support and resources to pursue sustainable international growth. Policymaking that recognises and facilitates the distinctive approaches of family businesses could boost UK export performance and global competitiveness.
See their full evidence submission here