Account reporting requirements
Account reporting requirements for co-operative and community benefit societies are becoming increasingly burdensome in comparison with those for companies. The thresholds in turnover at which societies are required to produce additional accounting reports are far lower and thus more onerous than the ones government has set for companies; with the latter being regularly increased over the years reflect economic reality. This puts our members at a disadvantage that comes with real business costs.
Member investors risking their capital directly in co-operative and community benefit societies stand to receive five times less support from HMRC than they would if investing in a company. See our finance page for more information.
Co-operative and community benefit societies are not being fully served by the deregulation agenda. For instance the FCA’s function as their registrar is outside the scope of the Growth Duty and the Small Business Appeals Champion, and we lack much needed consideration of mutual models in Business Impact Targets. The measures in the Enterprise Bill, while certainly welcome, will only exasperate these inequities.
Business support schemes
Schemes tend to contain built in presumptions more attuned to traditional profit driven and investor owned enterprise. One of the strongest examples is that of BIS Growth Vouchers. Under the scheme’s rules eligibility for Growth Vouchers extended only as far as businesses registered with Companies House, excluding the vast majority of co-operative businesses, which are registered with the FCA. We regularly uncover other examples where state support excludes co-operatives, such as a programme run by the Arts Council of England that is only open to charities and community interest companies.
Fragmented government responsibility
While the Department for Business Innovation and Skills (BIS) may in theory be responsible for creating an appropriate legal framework and regulatory environment for all businesses, in practice it has no role in legislating for co-operative societies. This role belongs to HM Treasury. The fragmentation of responsibility hampers the ability of BIS to serve the full diversity of business forms in the UK. One department in government should be given adequate responsibility and resource to serve as a centre of excellence in championing all business forms. Government should consult on moving the legislative function for co-operative and community benefit societies from HM Treasury to BIS. Help us take action.
Accessibility of data
Government should ensure official data on co-operatives and companies is equally accessible to the public. Read our response to the latest consultation on public access of the FCA Mutuals Register here.