We need an ‘L’ plate system for new entrepreneurs

London is the most unequal city in the developed world, with 1 million people currently workless amid areas of extreme wealth. We are staring a chronic, ugly problem in the face, which is destroying people’s aspirations and putting both young and old unnecessarily close to the bread-line. And this was before the seismic uncertainty created by Brexit.

It’s no secret this is a complex problem, and there is no easy fix. But as we feel the anger of those left behind by globalisation it’s the right time to ask what we can do to improve their world. We see that a huge number of them want to start their own businesses but who are frustrated and scared by the bureaucracy of the benefit system and the red tape of government. Many worry about getting into trouble and falling into unseen regulatory potholes. We’ve seen many threatened with eviction because of abrupt changes to housing benefit when they registered as self-employed.

Anyone dipping their toe in the water of new business will tell you it’s a daunting process. And that’s before you navigate housing benefit, organise child care or jump the hurdles of HMRC and Companies House.

‘Isn’t it time for an entrepreneur ‘L’ plate;

a window of tolerance for first time start-ups?’

The irony is, in no other walk of life would you be expected to get it right first time. Can you imagine gleefully driving off in your new Ford Fiesta having never had a lesson?

Isn’t it time then, for an entrepreneur ‘L’ plate; a window of tolerance for first time start-ups, that would be designed to support their journey into the world of business? With the new business ‘L’ plate on, if you stalled at a compliance junction you’d get patience and support rather than hostile demands to get off the road.

A new business ‘L’ plate would do the following:

1. Companies House and HMRC could allow an extra three months’ grace on production of first accounts and provide tele-mentoring to ‘L’ platers on completing the documentation and their first tax return.
2. New businesses would be able to access specific guidance and advice on tax and benefit issues with a dedicated adviser. It would be recognised by the housing benefit system and a bespoke system of assessment and support could be introduced for them.
3. The treasury should offer tax relief for new business ventures ‘L’ platers, for their first year’s income.
4. Local business rates, local authority market fees and a wide range of licences and permissions could be offered at a discount to help people starting out.
5. Established businesses could offer discounts on a whole range of services such as bookkeeping, banking, insurance, premises, IT and IT support, stationery, utilities to new start-ups.

And what’s more, it doesn’t have to cost the government.

This scheme would likely attract sponsors such as banks and insurance houses, who may well see the tremendous brand benefits of supporting people to build their own business. The government could even auction the scheme to business and offer exclusive rights for a set period.  Successful bidders would bring all their marketing talents to encourage more people to look at enterprise for the first time.

Let’s bring entrepreneurship in from the cold and stop expecting new entrepreneurs to work it all out for themselves. Introduce the ‘L’ plate for entrepreneurs and help fresh businesses get started.