North Derbyshire

March 2014

TOP50

SMEs

Your business is our business

Top 50 SMEs 2014

Welcome

My article last year noted the ethos of teamwork between public and private sectors needed to ensure the right support was available for growth in the region.

The success of this teamwork was highlighted by the “Invest in Chesterfield” event held in Westminster in November. Organised by Destination Chesterfield the event was attended by local MPs, the Chief Executive and Leader of Chesterfield Borough Council and Chuka Umunna, the Shadow Business Secretary, who commented “Destination Chesterfield is a good example of the public and private sector working together and taking responsibility to attract investment and promote their town”.

What is particularly pleasing, though, is that these fine words have been backed up by recent awards recognising successful development projects that have either taken place or received final permissions in 2013.

The £340 million Chesterfield Waterside Development, due to start on site in March, finished runner up to the Olympic Park in the National Regeneration and Renewal Awards. This theme continued with Chesterfield Borough Council’s regeneration team being named as Placemaking Team of the year at the inaugural Placemaking Awards. In the words of Councillor John Burrows, “this award for the council, and its marketing campaign through Destination Chesterfield, recognises a real team effort between business and the public sector to make Chesterfield a better place”.

Chesterfield Market Hall, reopened in October 2013 following a £4 million refurbishment, has been voted as the UK’s Top Small Indoor Market by the National Association of British Market Authorities.

Confidence created by such successes is being supported by increased funding being made available to the region. Regional Growth Fund (RGF) support for local businesses has been available for some time through the Sheffield City Region LEP, but D2N2, the Derby, Derbyshire, Nottingham and Nottinghamshire LEP, has secured £5m from RGF as part of its Unlocking Investment for Growth Programme (UI4G) supporting capital investment to create long term sustainable jobs. Smaller projects needing up to £75,000 of grants can also draw on the Derbyshire Economic Partnership’s Global Derbyshire Small Business Support Programme. In terms of support, the Enterprise Zone at Markham Vale has received further funding from Government towards building 180,000 square feet of medium sized business units whilst also making development ready some larger areas of land.

I trust that my article illustrates the successes and micro economic conditions in play in North Derbyshire that will provide support to the continued success of the top local companies, such as those highlighted in our survey.

John Warner john.warner@bhp.co.uk

Barber Harrison & Platt (BHP) is delighted to have provided the research for this second Derbyshire Times survey of the Top 50 SMEs in North Derbyshire.

Your business is our business

In aggregate the Top 50 SMEs contribute turnover of over £633 million and employ nearly 4,300 people. Figure 1 shows the key industry sectors in North Derbyshire and demonstrates how they have performed compared with our report last year. It is particularly encouraging to see that both the retail and wholesale sectors have continued to show growth, bucking the national trend.

Manufacturing continues to be a significant contributor of economic activity and it is this sector which will help to drive real growth in the area. As the Government has acknowledged it is manufacturing and engineering which will ultimately see the area and country return to pre-recession prosperity. Recent positive GDP figures showed the economy grew by 0.7% in the last quarter of 2013, the highest percentage increase since 2007. North Derbyshire is well placed to benefit from this upturn with its central and strong infrastructure links, grant funding through the Local Enterprise Partnership, and a committed Local Government. There really has never been a better time for local companies to start investing in the future and the recent announcement by the Bank of England, which gives further certainty regarding interest rates and policy, removes a lot of uncertainty for investment decisions. The Chancellor, George Osbourne, continues to make investment a key priority, with favourable tax breaks for both innovation and investment. It is hoped that the upcoming Budget in March continues to reflect this ambition.

Figure 1 also shows a very positive employment picture with the Top 50 employing nearly 4,300 people locally. As economic growth continues it is vitally important that businesses have the skilled workforce necessary to fuel the growth. This may prove to be a challenge and employers may have to adopt different strategies to secure skilled people. Engaging positively with schools, colleges and universities to ensure that the next generation has the necessary

skills is going to be crucial in ensuring that we have the right people with the right skills.

Whilst local retailers continue to face challenges, those in the food and leisure sector seem to be prospering, which is good news. Chesterfield still has one of the lowest unoccupied shop rates in the country.

In summary, our Top 50 SMEs survey reveals that North Derbyshire is home to many significant businesses whose performance is contributing significantly to the economic prosperity of the area.

BHP passionately supports businesses in North Derbyshire and our involvement in producing this survey demonstrates our commitment to being a key advisor to the SME sector.

Dominic Staniforthdominic.staniforth@bhp.co.uk

North Derbyshire looking forward with confidence

Figure 1

Turnover Pretax profit Employees

2014 2013 2014 2013 2014 2013

£000 £000 £000 £000 £000 £000

Services 263,768 285,813 23,866 28,827 2,328 1,923

Wholesale 211,948 138,863 10,762 10,089 643 620

Manufacturing1 84,595 118,339 10,299 9,248 647 966

Retail 73,493 60,688 5,203 4,079 666 254

Construction - 35,615 - 353 - 76

633,804 639,318 50,130 52,596 4,284 3,839

Top 50 SMEs contribute turnover of over

£633m and employ nearly

4,300people

As I commented in last year’s survey, North Derbyshire is home to a diverse range of businesses which make a significant contribution to the economic prosperity of the area and provide a substantial number of jobs to local people.

1The turnover from the companies in manufacturing appears to have decreased since 2013. In part this is due to one of the companies featured in last year’s survey having grown too large to qualify as an SME. This company turned over £28.7m at the time of our 2014 survey.

Your business is our business

Notes on Top 50 SMEs DerbyshireMoto Direct Holdings appeared in last year’s table as Eurohelmets (Holdings). Figures compiled by Barber Harrison & Platt using latest published financial information at the time of carrying out this survey filed at Companies House and financial data provided by Bureau van Dijk’s Fame. To qualify for inclusion, businesses must: • be an independent company OR the ultimate holding company of a UK group • be an SME, i.e. meets two of the following measures - less than 250 employees - less than £25.9m turnover per annum - less than £12.9m gross assets • not be a charity, academy, Limited Liability Partnership or listed Public Limited Company • be up-to-date in filing accounts at Companies House • be based in Derbyshire. For the purpose of this survey the following postcode areas have been used: DE4 2 - DE4 5, DE45 1, DE5 3, DE5 9, DE55 1 - DE55 2, DE55 4 - DE55 7, DE56 0 - DE56 2, S18 1 - S18 2, S18 4, S18 7 - S18 8, S20 5, S20 7, S21 1, S21 3 - S21 5, S32 1, S33 7 - S33 9, S40 1 - S40 4, S41 0, S41 7 - S41 9, S42 5 - S42 7, S43 1 - S43 4, S44 5 - S44 6, S45 0, S45 8 - S45 9, S80 4.

For financial periods of more than or fewer than 52 weeks, the figures have been annualised on a pro-rata basis. Private company information can be incomplete: in preparing this table every reasonable effort has been made to ensure that no qualifying companies have been omitted. In certain circumstances the compilers of the table have made exceptions to the qualification criteria and their decision is final.

TOP 50 SMEs DERBYSHIRE 2014Top 50 2014 Top 50 2013 Company name Activity Location Latest accounts

dateProfit before tax

Year 1 £000Profit before tax

Year 2 £000 Turnover £000 No. of employees

1 1 P R Marriott Drilling Test drilling and boring Chesterfield 30/04/2012 3,198 595 17,887 118 2 3 Moorhen Holdings Roofing materials manufacturer Chesterfield 30/06/2012 2,360 3,072 19,816 43 3 11 Cathelco Protection & anti-fouling for shipping Chesterfield 31/03/2013 2,137 1,682 16,603 96 4 29 David Nieper Ladies underwear Matlock 31/03/2013 1,936 631 13,294 234 5 4 AEW Paddock Motors Vehicle parts & spares Matlock 31/12/2012 1,713 2,171 12,540 48 6 10 System Q Security system wholesaler Chesterfield 31/01/2013 1,603 1,716 6,483 28 7 Asmet Metallurgical consumables Dronfield 30/09/2012 1,520 2,341 25,503 11 8 John Smedley Knitwear Matlock 31/03/2013 1,509 125 15,167 380 9 Ebecs Hardware consultancy & computer activities Chesterfield 31/03/2013 1,485 484 15,467 106 10 15 Derbyshire Aggregates Aggregate manufacturer Bakewell 31/03/2013 1,462 1,446 12,280 45 11 12 Capital Refractories Refractory materials, ceramic corse & related products Chesterfield 30/11/2012 1,452 1,564 22,749 187 12 8 Chesterfelt Holdings Roofing products Chesterfield 30/11/2012 1,379 1,989 6,943 33 13 18 URA Ventures Vehicle hire & sales Chesterfield 31/12/2012 1,333 1,124 12,599 34 14 46 Speeds Property management Alfreton 31/12/2012 1,315 313 1,259 9 15 27 Mayfly Waste Engineering Manufacture of containers for oil & gas industry Chesterfield 31/03/2013 1,229 673 19,958 102 16 Chesterfield Poultry Halal poultry wholesaler Chesterfield 30/06/2012 1,182 260 45,269 57 17 Acclaim Housing Group Social housing management Matlock 31/03/2013 1,155 (1,054) 24,718 151 18 Colortronic (U.K.) Machinery manufacturer for the plastics industry Chesterfield 31/12/2012 1,067 - 7,518 27 19 22 Moto Direct Holdings Motorcycle parts & spares Alfreton 31/12/2012 1,043 851 13,801 49 20 23 Johnson Bros (Tours) Coach & tour operators Worksop 31/08/2012 1,038 826 8,674 121 21 19 UKCG Group Carbon rod manufacturer Belper 30/06/2012 1,019 2,488 18,150 23 22 MPS Care Nursing home management Alfreton 30/04/2012 1,011 118 7,954 399 23 16 Clee Hill Plant Holdings Plant hire Chesterfield 31/12/2012 1,003 1,324 12,841 160 24 24 Long Rake Spar Company (The) Industrial, mineral & decorative aggregates Bakewell 31/03/2013 974 822 10,168 53 25 Leengate Valves Wholesale of valves Alfreton 31/12/2012 968 860 6,687 21 26 21 Designer Contracts Interior design products Chesterfield 31/10/2012 926 910 24,011 161 27 Granwood Holdings Floor coverings & sealant manufacturer Chesterfield 31/12/2012 843 235 6,152 50 28 17 Milner Off Road Vehicle parts & spares Matlock 31/10/2012 798 1,281 7,558 53 29 41 Arbo (Holdings) Sealant & adhesive manufacturer Belper 31/01/2013 797 398 8,551 59 30 14 Maxigrow Wholesale of horticultural products Chesterfield 31/03/2013 673 1,509 8,110 38 31 6 BHH Developments Shop fitters Chesterfield 31/10/2012 655 2,009 4,730 22 32 Geofabrics Holdings Geotextiles and geocomposites manufacturer Chesterfield 31/12/2012 641 - 5,668 30 33 35 Xbite Online retailer Sheffield 30/06/2013 622 516 21,491 62 34 49 Evolution Funding Financial brokerage & car sales Chesterfield 31/12/2012 593 295 13,013 - 35 EP Industries Plant hire, sales & repairs Alfreton 31/07/2012 566 254 8,818 30 36 30 Shires Pharmacies Dispensing chemist Chesterfield 31/05/2013 565 614 4,978 56 37 SRS Rail System (Holdings) Railway industry services Chesterfield 30/04/2012 560 211 5,384 68 38 33 LGH Holdings Industrial equipment hire & repairs Alfreton 30/04/2012 535 314 6,662 56 39 36 TM Steels Steel stockholders Chesterfield 30/09/2012 528 515 11,651 60 40 Genden Holdings Dental practice Alfreton 31/03/2013 492 (410) 7,986 97 41 40 Newburgh Holdings Engineering component manufacturer & property developer Hope Valley 31/03/2013 463 399 13,247 151 42 CK Associates Recruitment services Chesterfield 31/10/2012 455 - 17,779 260 43 Bankwood Collective models, toys & stationery distributor Ripley 31/03/2013 452 740 9,955 45 44 H.Turner & Son Investment property management, real estate & farming Chesterfield 30/09/2012 442 (606) 6,593 41 45 25 BKJ Construction Property rental Alfreton 31/12/2012 435 792 4,059 5 46 UK Egg Centre Import and export of egg products Chesterfield 30/09/2012 433 8 26,843 7 47 31 AGW Holdings Electronic equipment manufacturers Chesterfield 31/12/2012 417 580 3,528 89 48 Can UK Holdings Geotechnical and special access trade services on structures Chesterfield 28/02/2013 398 - 7,947 109 49 32 Robinsons Caravans Caravan retail & repair Chesterfield 31/12/2012 376 544 11,700 8150 Owen Taylor And Sons Wholesale & catering butchers Alfreton 31/10/2012 374 102 13,061 119

Your business is our business

Nominations for next year’s table are welcome at info@bhp.co.uk.

TOP 50 SMEs DERBYSHIRE 2014Top 50 2014 Top 50 2013 Company name Activity Location Latest accounts

dateProfit before tax

Year 1 £000Profit before tax

Year 2 £000 Turnover £000 No. of employees

1 1 P R Marriott Drilling Test drilling and boring Chesterfield 30/04/2012 3,198 595 17,887 118 2 3 Moorhen Holdings Roofing materials manufacturer Chesterfield 30/06/2012 2,360 3,072 19,816 43 3 11 Cathelco Protection & anti-fouling for shipping Chesterfield 31/03/2013 2,137 1,682 16,603 96 4 29 David Nieper Ladies underwear Matlock 31/03/2013 1,936 631 13,294 234 5 4 AEW Paddock Motors Vehicle parts & spares Matlock 31/12/2012 1,713 2,171 12,540 48 6 10 System Q Security system wholesaler Chesterfield 31/01/2013 1,603 1,716 6,483 28 7 Asmet Metallurgical consumables Dronfield 30/09/2012 1,520 2,341 25,503 11 8 John Smedley Knitwear Matlock 31/03/2013 1,509 125 15,167 380 9 Ebecs Hardware consultancy & computer activities Chesterfield 31/03/2013 1,485 484 15,467 106 10 15 Derbyshire Aggregates Aggregate manufacturer Bakewell 31/03/2013 1,462 1,446 12,280 45 11 12 Capital Refractories Refractory materials, ceramic corse & related products Chesterfield 30/11/2012 1,452 1,564 22,749 187 12 8 Chesterfelt Holdings Roofing products Chesterfield 30/11/2012 1,379 1,989 6,943 33 13 18 URA Ventures Vehicle hire & sales Chesterfield 31/12/2012 1,333 1,124 12,599 34 14 46 Speeds Property management Alfreton 31/12/2012 1,315 313 1,259 9 15 27 Mayfly Waste Engineering Manufacture of containers for oil & gas industry Chesterfield 31/03/2013 1,229 673 19,958 102 16 Chesterfield Poultry Halal poultry wholesaler Chesterfield 30/06/2012 1,182 260 45,269 57 17 Acclaim Housing Group Social housing management Matlock 31/03/2013 1,155 (1,054) 24,718 151 18 Colortronic (U.K.) Machinery manufacturer for the plastics industry Chesterfield 31/12/2012 1,067 - 7,518 27 19 22 Moto Direct Holdings Motorcycle parts & spares Alfreton 31/12/2012 1,043 851 13,801 49 20 23 Johnson Bros (Tours) Coach & tour operators Worksop 31/08/2012 1,038 826 8,674 121 21 19 UKCG Group Carbon rod manufacturer Belper 30/06/2012 1,019 2,488 18,150 23 22 MPS Care Nursing home management Alfreton 30/04/2012 1,011 118 7,954 399 23 16 Clee Hill Plant Holdings Plant hire Chesterfield 31/12/2012 1,003 1,324 12,841 160 24 24 Long Rake Spar Company (The) Industrial, mineral & decorative aggregates Bakewell 31/03/2013 974 822 10,168 53 25 Leengate Valves Wholesale of valves Alfreton 31/12/2012 968 860 6,687 21 26 21 Designer Contracts Interior design products Chesterfield 31/10/2012 926 910 24,011 161 27 Granwood Holdings Floor coverings & sealant manufacturer Chesterfield 31/12/2012 843 235 6,152 50 28 17 Milner Off Road Vehicle parts & spares Matlock 31/10/2012 798 1,281 7,558 53 29 41 Arbo (Holdings) Sealant & adhesive manufacturer Belper 31/01/2013 797 398 8,551 59 30 14 Maxigrow Wholesale of horticultural products Chesterfield 31/03/2013 673 1,509 8,110 38 31 6 BHH Developments Shop fitters Chesterfield 31/10/2012 655 2,009 4,730 22 32 Geofabrics Holdings Geotextiles and geocomposites manufacturer Chesterfield 31/12/2012 641 - 5,668 30 33 35 Xbite Online retailer Sheffield 30/06/2013 622 516 21,491 62 34 49 Evolution Funding Financial brokerage & car sales Chesterfield 31/12/2012 593 295 13,013 - 35 EP Industries Plant hire, sales & repairs Alfreton 31/07/2012 566 254 8,818 30 36 30 Shires Pharmacies Dispensing chemist Chesterfield 31/05/2013 565 614 4,978 56 37 SRS Rail System (Holdings) Railway industry services Chesterfield 30/04/2012 560 211 5,384 68 38 33 LGH Holdings Industrial equipment hire & repairs Alfreton 30/04/2012 535 314 6,662 56 39 36 TM Steels Steel stockholders Chesterfield 30/09/2012 528 515 11,651 60 40 Genden Holdings Dental practice Alfreton 31/03/2013 492 (410) 7,986 97 41 40 Newburgh Holdings Engineering component manufacturer & property developer Hope Valley 31/03/2013 463 399 13,247 151 42 CK Associates Recruitment services Chesterfield 31/10/2012 455 - 17,779 260 43 Bankwood Collective models, toys & stationery distributor Ripley 31/03/2013 452 740 9,955 45 44 H.Turner & Son Investment property management, real estate & farming Chesterfield 30/09/2012 442 (606) 6,593 41 45 25 BKJ Construction Property rental Alfreton 31/12/2012 435 792 4,059 5 46 UK Egg Centre Import and export of egg products Chesterfield 30/09/2012 433 8 26,843 7 47 31 AGW Holdings Electronic equipment manufacturers Chesterfield 31/12/2012 417 580 3,528 89 48 Can UK Holdings Geotechnical and special access trade services on structures Chesterfield 28/02/2013 398 - 7,947 109 49 32 Robinsons Caravans Caravan retail & repair Chesterfield 31/12/2012 376 544 11,700 8150 Owen Taylor And Sons Wholesale & catering butchers Alfreton 31/10/2012 374 102 13,061 119

Your business is our business

The North Derbyshire region would appear to be no exception to this trend with the number of transactions in the past 12 months increasing by 40% compared to the same period last year. Admittedly this increase is from a low base but nonetheless it is encouraging to note that local businesses are increasingly using M&A as a means to drive growth.

The largest deal with a disclosed value was the £122 million flotation on the London Stock Exchange of Eckington based software and control systems provider, Servalec. This transaction reflects a renewed interest in public markets, driven in large part by overseas investors seeing the UK as an attractive destination in which to deploy capital.

On a more regional level the banks, after a sustained period of criticism, are also playing their part in driving M&A activity. Of particular note is the positive impact that renewed banking confidence is having on the ability to fund management buyouts. According to deal database Zephyr, North Derbyshire recorded six buyouts in the past 12 months – up from just a single deal in the previous year. Well-known local businesses that have recently seen their management teams take an ownership stake include CPL Industries, Meter Provida and Leengate Valves.

At BHP Corporate Finance, we were particularly delighted to act as lead advisor to the management of Leengate Valves on their buyout. Previously part of German multi-national Linde AG, the transaction saw management take a majority shareholding in the business supported by YFM Equity Partners and HSBC. This type of deal – a SME buyout funded by debt and equity - was particularly hard hit by the economic downturn and it is therefore very pleasing to see more of the region’s management teams having an opportunity to buy their business and thereby retain employment and wealth creation in North Derbyshire.

In conclusion , whilst I do not expect (and would not want) a return to the frothy market conditions seen pre 2008, our pipeline of transactions at BHP suggests that the next 12 months will continue to see a healthy number of North Derbyshire businesses include M&A transactions as a key part of their strategy.

Don Graydon.gray@bhp.co.uk

Encouraging signs in the M&A market

The level of mergers and acquisitions (“M&A”) naturally reflects the health of the wider economy and with the outlook continuing to improve, we have seen a notable increase in confidence from business owners looking to buy and sell.

The largest deal with a disclosed value was a

£122m flotation on the London Stock Exchange

Your business is our business

CASE STUDY: eBECSFeatured at number 9

eBECS is a Chesterfield based company with offices in the UK, USA and Saudi Arabia and over 200 staff based around the world. eBECS specialise in the design and delivery of industry focused Microsoft Dynamics Business Solutions comprising Customer Relationship Management, Enterprise Resource Management and Business Intelligence solutions. We were recently proudly awarded the Global ERP partner of the Year and the UK Microsoft Dynamics Reseller of the Year for the 3rd time in 4 years. Customers include Amec, Aston Martin, Marshalls, the RNLI and the Royal Canadian Mint.

What are the main drivers behind the continuing success of your business? eBECS’ philosophy is simple: technology is about successfully connecting people, process and progress. We take the time to understand the customers’ business

needs. We then use our industry experience and knowledge to respond with business applications that are tailored to their specific industry needs.

Feedback from our customers has been excellent and we have been rewarded with a Microsoft award for “ERP Global Partner of the year for 2013”.

What are the biggest challenges you have overcome in the past 12 months? The greatest challenge has been managing eBECS’ growth without compromising our quality of service. This has been achieved by implementing a matrix management structure and employing experienced staff, who have a clear mandate to deliver successful projects with a proven and repeatable methodology that is focused on delivering return on investment to the customer. eBECS has significantly invested in its customer experience department to ensure we also provide all the necessary services to our customers in order for them to advance in their adoption of their business solution.

What do you anticipate to be the biggest challenges to your business over the next 12 months? Keeping up with demand for our services will be our biggest challenge in the next 12 months. Derby based companies are approaching eBECS to help them implement new business software and also help rescue business software projects that have failed in the past.

eBECS will achieve this through our continued investment in people at every level of the organisation, for example we have a graduate/apprentice scheme that has been delivering a flow of new talent into the organisation for the last 4 years, we also offer cross training to individuals looking to move from other business solution resellers.

CASE STUDY: CK AssociatesFeatured at number 42

Established 23 years ago in Chesterfield, CK Group provides specialist recruitment and outsourcing services to the scientific community and associated industries.

Our qualified consultants are specialists in providing world-class recruitment and HR services through our specialist divisions: CK Science, CK Clinical, CK IT, CK Aspire and CK Engineering.

What are the main drivers behind the continuing success of your business? CK Group’s success can be attributed to a number of key points:• Industry knowledge• Service innovation• Excellent staff training and support • Operating within the life sciences

industry which is resilient to economic downturns

CK has constantly worked on improving its service-offering to clients, moving from a traditional recruiter model to offering outsourcing solutions, which currently make up 40% of revenues. Our highly qualified recruiters are specialists in their sectors and are committed to delivering the high levels of customer service expected by both clients and candidates. Over the last 23 years, we

have established great relationships with pharmaceutical, chemical, waste and engineering companies. Last year we provided recruitment services to 26 of the top 30 global pharmaceutical companies, mostly in the UK but increasingly in European markets.

What are the biggest challenges you have overcome in the past 12 months? The main difficulties encountered were twofold: firstly, squeezed cashflow due to newly restructured payment terms enforced by large multi-national clients, a problem that is unlikely to disappear in the future. Secondly, the war on talent is increasing and CK had to commit larger resources to candidate attraction to support our clients’ more complex requirements. In fact there was a noticeable shortage of qualified and suitably capable candidates across CK’s entire niche skill set.

Along with tightening budgets, CK worked closely with our professional advisors and banking team to ensure the availability of sufficient resources to fund the company’s growth. This included investing in new websites and new methods of candidate attraction to increase awareness of the brand. Most importantly, we also focused on developing and training an internal team of skilled Resourcers. As a result of these investments, CK has been able to stay ahead in supporting our clients in their battle for talent.

What do you anticipate to be the biggest challenges to your business over the next 12 months?CK Group has identified a number of problems that will need solving throughout 2014 in order for the company to keep to its ambitious expansion plans. The main challenges will revolve around:• Globalisation in the face of demanding

purchasing solutions• Repositioning CK as a leader in

functional outsourced solutions for the science community

• Establishing the new CK Engineering division

• Finding talented staff of the calibre to meet the requirements of our expanding client base in Europe

CK’s management has already focused resources to support the new service offerings in outsourcing through CK Aspire. Interviews are underway for multi-lingual consultants to work in overseas markets and in-depth market research has been undertaken which proved our clients have a requirement for a class-leading engineering recruitment solution. It promises to be an exciting year.

Your business is our business

The Top 50 SMEs in our area in 2013 employed 3,839 people. Those included in 2014’s Top 50 SMEs employ 4,284 people. Whilst the companies in the surveys are not directly comparable, indeed three of the companies featured in 2013’s survey have grown to such an extent that they are now too big to be categorised as SMEs, it is good to note that thriving SMEs are seeing the benefit of attracting and retaining good employees. Tax reliefs and incentives introduced by the Government over the last year will have undoubtedly helped employers with this.

The introduction in the Autumn Statement of the £2,000 allowance for all employers and the exemption from National Insurance (NI) for under-21s will be a boon for small employers and employers who have a younger workforce. This focus on younger workers may also encourage employers to look to the widely well regarded apprenticeship scheme to fill their recruitment needs. A consultation into the funding of apprenticeships was also announced at the end of last year and it is hoped that any changes will not disadvantage the current position significantly.

The introduction of auto enrolment, which will affect most small and medium employers in 2014 and 2015, will add to costs and administrative time, but can provide an opportunity for employers to review the overall remuneration packages they offer their employees. Employers can take the opportunity to introduce flexible benefit packages which, when structured correctly, can provide a tax

and NI saving for both employee and employer. These packages recognise that whilst money still makes the world go round, other benefits such as pension contributions, extra holidays, childcare vouchers and employer provided cars, computers and mobile phones can also incentivise and retain the workforce.

To incentivise key employees, changes were announced in 2013 to improve the tax efficient HMRC approved Enterprise Management Incentive Scheme and we continue to see many businesses implement this scheme to recruit, retain and motivate key personnel. A new classification of Employee Shareholder was also introduced in 2013/14. Whilst this has proved unpopular in some corners due to employees having to forgo employment rights, as there are income and capital gains tax exemptions to be obtained, this planning may well be appropriate in some circumstances.

Employee ownership was also on the Government’s agenda and 2014 will see the introduction of a capital gains tax exemption on sales to qualifying employee controlled trusts along with tax free bonuses for employees of an employee controlled organisation.

As the electioneering is starting to increase, it is clear that a universal objective for most parties is to support employers and increase employment, so it is likely that further reliefs and incentives for employers will be introduced in Budget 2014 and beyond.

To summarise, employees are usually cited by most businesses as one of their key assets and so businesses should take appropriate advice to ensure they are maximising all possible opportunities to reward, recruit and incentivise their employees in a tax efficient manner.

Zoe Robertszoe.roberts@bhp.co.uk

Attraction and retention

It is good to note that thriving SMEs are seeing the benefit of attracting and retaining good employees

Your business is our business

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