More UK start-ups survive first year of trading than European counterparts
15th June 2015 | News
Britain’s start-ups are more resilient in their first year of business than Europe’s other major economies, according to a study by Rousseau Associates.
The UK’s start-up survival rate after the first year of trading stands at 93 per cent, compared to an average survival rate of 83 per cent across the rest of Europe.
Start-ups in Germany and France did not fare so well with first year survival rates of 78 per cent and 79 per cent respectively.
Rousseau Associates believe the UK’s comparatively relaxed employment laws make it easier for British business start-ups to recruit staff and thrive. Staff can be employed on flexible working hours and employers can hire more staff without facing legal issues.
Government initiatives may also be stabilising UK start-ups in their critical inaugural year of trading. R&D tax relief allows micro business owners to claim an additional 125 per cent of their eligible research and development costs from their taxable income.
The new Conservative government recently pledged to further reduce red tape for small businesses by £10bn during the new parliament; a move which is viewed by many companies as a top priority.
Michael Heath, business development director, Rousseau Associates, said: “UK small businesses have been given a helping hand with favourable government policies, which have allowed them to keep growth on track.
“These policies have helped to make it less of a risk for start-ups to take on new staff and expand. While zero hours contracts have often been misunderstood they can offer both employers and employees flexibility.
“The recession also forced a great deal of innovation. For example, while the high street was facing huge numbers of voids the pop-up shop and restaurant model provided an efficient way for entrepreneurs to test new concepts before committing to setting up a business.”