Page 1: Introduction
In the past there was always a belief that large corporations with the ability to develop mass-production techniques and gain from economies of scale would eventually dominate the UK economy. Many thought that economic growth depended upon the fortunes of large organisations and that the movement towards global companies would eventually confine small and medium-sized enterprises (SMEs) to a minor role within the UK economy.
Employment by a large business would represent security, opportunity and possibly a 'job for life'. However, these beliefs ignored the effects of economic downturns in various parts of the world as well as the drive for increasing efficiency and increased global competition would have upon the fortunes of large businesses. Since the 1980s, the process of downsizing by many major businesses has taken place alongside the development of an enterprise culture that has caused resurgence in the SME sector.
This massive expansion in the number of SMEs since 1980 has taken place despite the sometimes difficult and hostile environment which threatens micro organisations from many directions. For example, competition from larger organisations, bureaucracy and regulations, high bank charges, changing interest rates and environmental uncertainty are frequently cited as making life difficult for small businesses, which are often felt to be the most vulnerable members of the business community.
This case study illustrates how HM Customs & Excise, one of the oldest UK government departments, works supportively with small businesses by helping them to understand various laws and account for Value Added Tax (VAT) correctly and efficiently.
The case study illustrates how the department plays a crucial role in providing supporting services that balance the interests of SMEs and help to reduce the burden of bureaucracy and uncertainty in their business environment, with the wider interests of society.