Guest Post: Thanks, UK Government, for NOT helping me build my startup

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This guest post was written by Azeem Azhar, founder of Viewsflow.

Viewsflow is building what it describes as an “expertise platform” and has launched a consumer business aggregator, built on this platform. You can read more from Azeem on Twitter.]

We are a fast growing tech company with a deep product backlog, high growth on our core Web and email offerings and an overwhelming desire to invest in our customer understanding and in our technology. As with all the startups Techcrunch covers, we are working at full tilt. Any slack that appears (ha!) goes into customer understanding and technology investments we need to support that.

A lot of people have helped us in our journey to build the world’s database of professional expertise. To name but a few, by their twitter handles: @robinklein, @rayyans, @nauiokaspark, @wdavc, @eileentso, @quixotic, @moia, @umairh, @aainslie, @harikunzru, @julien51, @philiphotchkiss, to name but a few.

And I thought it might be worth accounting for Her Majesty’s Government’s help in our entrepreneurial journey, in the form of this missive.

  • Education: Of our (extended team) of eight, I am the only one educated in the UK. And then my degree (PPE at Oxford) is of tangential relevance. The others, whether on the development, product management or knowledge engineering side, have been educated in Europe, Canada, US and Australia.
  • Company support: HMGs input so far has been to send me constant reminders to file my 363, now threatening to strike us off the company record. Yep, we’re a 13 month old company with £6k in revenues, and you want my 363 already? Should I spend time filing it ahead of working out the global licensing agreement framework with X Megacorp? Or reviewing the latest release candidate of our iPhone app? Or indeed writing this blog post?
  • Taxation: HMG has also been kind enough to pester us with VAT returns every quarter. From a cashflow standpoint this is fine because I have a few refunds, but in reality that puny cashflow doesn’t matter a jot to our business right now. And anyway, you sent me a cheque rather than making a direct bank transfer, because obviously waiting in a queue is the best use of my time.
  • EIS: thanks for the EIS relief, although I have to confess that less than 10% of the capital we raised was eligible for EIS relief. The paperwork is absurdly complicated both for submission and for the forms themselves. Why make it this complex, when it could be simple and allow me to spend more time on–I don’t know–talking to lead customers.
  • Employee options: Yep. It’s really important to incentivise employees. And thank god one of my cofounders had trained as a solicitor. And we still had to iterate the forms for the EMI three times.
  • Enterprise finance guarantee: To misquote Carrie Fisher, ‘You can put up the website for it, but you sure as hell can’t get the banks to lend’

Where did you help? (Credit where it is due)

  • You mishandled regulation of the financial services which allowed for a runaway risk culture resulting in a massive financial & economic implosion in 2007. Watching this culture of satisfaction implode and wake us out of our reverie, prompted me to pull together what is now Viewsflow.
  • You created the conditions that make it really tough for entrepreneurs to raise capital in the UK, which has worked in our favour. (Be greedy when fearful, etc).
  • You joined the EU which has allowed me to access some awesome talent in Europe. And your former colonies have given me access to some brilliant Canadians and Australians.

But what about EIS, I hear you say?

  • EIS is a nice bonus. A definite nice to have, and certainly helpful for some of our current and future shareholders. But I am looking at our funding needs over the next three years and I can comfortably say that EIS is in most scenarios not going to be a deciding factor in our success.

What could you have done?

  • Eliminate the byzantine paperwork and filing requirements. Make it simple, not as a government employee considers simple, but as a kick-ass user experience designer considers simple.
  • Allow me to accrue my filings to some later date in the future, when we are successful or when we’re in administration. Technology businesses have binary outcomes. There is no happy middle.
  • Generally stay out the way.

What I can say is that you have lived up to my expectations of you. I expected you to be troublesome, problematic, unempathic and a general PITA. You haven’t disappointed.

  • Craig Mason

    Is VAT really that much of a pain?

    I file mine online (takes about 2 mins looking at the books to get the figures, and we get an extra 14 days to do so). Refunds are sent to us via BACS. Any VAT we owe is paid via Direct Debit.

    Annual return is pretty simple too. Your accountant should handle most of this for you anyway.

    • azeem

      It is all about friction–and any element of friction. Startups, especially technology startups, will benefit from any marginal advantage or disadvantage.

    • Danvers


      Your annual return should take 5-10 minutes to complete and can be filed online which is much better than most countries.

    • innocence

      i don’t blame you at all. i always feel the same way.

    • innocence

      you look so cute

  • Phil

    You want to experience pain running a small (tech) startup without government support on any level?
    Try Spain!

    In some ways it was nice to read this article to know that it isn’t rosy everywhere else.

  • Daniel Mitchell

    Whoever the editor is needs to actually edit this post. Techcrunch do you just let any idiot write articles here?

    Governments are useless, as you’ve stated in your final paragraph but you’ve been asked or decided to write an article stating the bleeding obvious. Er, why?

    You haven’t put a funny spin on this and you’ve managed to take the 2007 market blow up personally. We are all dealing with the same bullshit here and you’ve managed to make it more drab that usual.

    Sorry to be negative but I have to be honest with this piece.

    In reality if you don’t like the way the UK government operates you are free to do business elsewhere. Obviously if yo’re going to write half assed blog posts about them at least make it funny for the rest of us

  • Martin

    You should totally come to Bulgaria and try to run a start up here, then you will think UK government is an incubator :)

  • Will Rowan

    oh, yeah, I hear where you’re coming from.

    Government is *so* uninterested in its smaller business customers (forgetting that most of the population, not working for government, works for smes, not Plcs).

    You can see this in the services on offer… take VAT.
    (bear with me on this – it’s symptomatic of the culture)
    Yes, you can file online… but the Returns page is *hidden* by the navigation. UI? nope.
    & the form itself has to be mis-completed if you’re on a flat rate scheme. (Helpdesk advice: “just ignore that box, yes, it’ll throw an error, but don’t worry” )

    Another example, this time from the services supporting enterprise & innovation: email? No, the CEO doesn’t *do* email. wooot! How did they get the job?

    The shame of it is that there are some hugely talented, smart, and capable folk involved in government services to business.
    The underlying culture doesn’t understand the innovative entrepreneurs that the good guys in government services are trying to help.

  • Justin Bellinger

    Generally, it’s hard to run a start-up anywhere.

    We all hate the paperwork side, but you know what, that’s part of running a business – plus, with such low turnover, you didn’t have to register for VAT, but chose to to get the VAT back from your capital purchases, and hence registered because it worked out better for you buying things.

    Well, filing is part and parcel of the process. Did you get back enough to cover your time costs for filing? If not, you should have bit the bullet and paid VAT without registering (and getting the it back.)

    I looked at many countries for starting a firm, and the UK came in somewhere near the bottom of the list for starting a business.

    Good luck, but whine about it less, eh?

  • Jessie Anderson

    What a whiney post.

  • Steve Parks

    Hi Azeem,

    Fair play to you for speaking out. These are common complaints of entrepreneurs. Everyone gets frustrated by the sheer amount of stuff there is to do in starting a business, and the non-sales based work that seems to just be an extra un-necessary burden. I know that feeling myself, and have made the same complaints as you at those times.

    But it does mean we can be drawn into being a bit illogical and blaming things other than ourselves – and asking for the impossible.

    For example, in the same post you simultaneously criticise the government for not regulating the banking industry enough, leading to the financial crisis – and for regulating businesses too much. So where’s the line drawn as to which businesses to regulate and how much to regulate them? Put any human being in charge, including you or me, and everyone else would disagree with our decision on that. But basically what you want is a common human thought: just regulate everyone else. Leave my business alone, but make sure the other businesses sort my pension out properly, don’t overcharge me for services, etc. It’s natural, but not really a valid request.

    In my experience the government side has been pretty easy to deal with:

    1. Companies House are brilliant. The forms are simple, clear and short. That 363 you complain about takes minutes to submit, especially online. It only needs to be submitted once a year, and is simply a way of checking they have the right information.
    I challenge you to find a simpler, cheaper process for forming and administering a limited liability company in any developed economy.

    2. The VAT returns are really simple – 7 boxes to fill in on 1 side of A4, which, even if you don’t have an FD or book-keeper, your accounting software can print out directly. You just have to sign it. During the worst of the recession I saw a number of examples of HMRC being extremely lenient in chasing up late VAT returns, payments etc, because they knew times were hard. They’re not bad folk really (although I’ve done my fair share of cursing under my breath in dealing with them – but hey, that’s the relationship between entrepreneurs and tax authorities the world over). You complain of being sent a cheque – did you send them your BACS details with a request to pay by BACS? They’ll do that, but like anyone they do need your bank details.
    However, HMRC’s online services are rubbish and need a lot of work if that’s the direction they want to take us in.

    3. EIS is a great scheme for encouraging angel investment in fast-growth companies. It’s pretty easy and flexible to setup and use. I can’t see a realistic way to reduce the small amount of paperwork involved. There aren’t many tax-advantageous schemes in developed economies with so little paperwork.

    4. EMI is more complex, but then it’s a relatively complex legal agreement between you, your management team and the tax authorities. In total it usually costs about £5k in professional fees to set up. If you’re a fast growth company, that’s not much really. It’s not designed for lifestyle businesses with smaller revenues or funding.

    In my experience, entrepreneurs have more problems dealing with large commercial organisations than with government. The banks put fees up while reducing service quality, and forcing you to wait for ages on hold to call-centres who can’t help you anyway, even after you’ve explained the situation to the 3rd person. Large corporate clients make you jump through so many time consuming hoops in drawn out tendering processes for even small-ish contracts, and then pay you late. And large suppliers (the one I hear most entrepreneurs complain about is BT) make so many mistakes, and then don’t seem to care about putting them right.

    And, I agree with your point about the Enterprise Finance Guarantee – but would argue that the blame lies more squarely in the private sector (banks) than the public sector.

    So, in summary, whatever government we have, run by whichever party, and with whoever leading it, we’ll all always be frustrated by bureaucracy, and either too much regulation (wasting our time), or too little (people nicking our money).

    Therefore, I prefer just to hire a good accountant, a good lawyer, and any other professional advisers – and as the business grows to have a good FD – and focus my time on building relationships with my customers and making sales.

    If you’re boot-strapping, then the price of that is a lot more hard work and admin to do yourself. But otherwise, if you’re not funded or earning enough to have good staff and advisers to handle this, then your problems may be bigger than just finding the time to fill in a 363.

    But at some time we’ve all felt like you feel at the moment – so just keep going and it gets better. Good luck with your business, and have fun.

  • Jand

    Wow…I’m sure this guest post took longer than it would to just click through an Annual Return form.

    The UK has one of the cheapest and easiest systems to navigate in the world. It couldn’t really be much easier. If you want to benefit from the legal system in the UK…. compliance with CH is not too much to ask really is it.

    If waiting in a queue is too hard.. just use the quick drop box to pay in your cheques.

    Ultimately though…. if you can’t be bothered with all the paperwork (or e-filing)… just ask a freelance accountant to be your company secretary and do it all. There’s tons of them around.

  • giulia baldi

    brilliant post…
    this is not the worst place in the world to set up a start up, but could definitely be better.
    keep up the good work!

  • Timmeh

    Go move to France then.

  • Richard Harrison

    Crying over filing a 363 is ridiculous, it’s a simple form that takes like 15 minutes to fill in, once per year. Stop whining about VAT too. If your revenues are just £6k (lol, “high growth”) then why even bother registering for it.

    What a joke-shop operation.

  • giulia baldi

    Need to add: we all know UK bureaucracy can’t even be compare to France, Spain, Italy ones… still, paper works are now more than they used to be, aren’t them? (And is this maybe a Europe effect?)

  • giulia baldi

    Need to add: we all know UK bureaucracy can’t even be compared to France, Spain, Italy ones… still, paper works are now more than they used to be, aren’t them? (maybe a Europe effect?)

  • TM

    Wow, if you’re whining about this, I really don’t see how you’re going to be successful with a startup longer term. These are non-issues. You will be faced with real road bumps/hurdles/walls, and if issues like VAT and returns affect you, I hate to see what you’ll do with REAL problems.

  • Damon Oldcorn

    Look you get used to it after the first 10 years – only kiddin…… not sure you really want to hear from above on the VAT simple theory either……

    and the good news is ……… we all agree
    and now on to taper relief and other adventures in public sector land……..

  • Barry

    I totally get the frustration borne out of the desire to get on with the business w/o having to deal with other “stuff” BUT as someone else said its all part of doing business. The UK is comparitively lite when it comes to this stuff and its a mistake to ignore it. Failing to spend 5 minutes doing your annual return could result in your company being struck off with its assets all going bona vacantia to the crown. Worth setting aside a few minutes to avoid surely…

  • Rob

    Why do people in the tech industry think that they deserve special treatment if they start a company? Every business in the UK, new or old has to do these things. You will also only get VAT invoices if you registered for it in the first place or have a turnover in excess of circa £60k!

    Also to note, your happy to accept EIS but not complete your tax returns? LOL!

    Techcrunch, is this the best article you could find?

  • Nicholas Lovell

    There are many things that annoy me about the UK government’s approach to small businesses (having us manage the Working Family Tax Credit, requiring insurance for two man shops where both men are directors and shareholders, etc), but the ones you picked are not ones I have an issue with.

    VAT is, in fact, one area where I think the Labour government has made good on its statements about reducing red tape with the introduction of its flat rate tax scheme for businesses generating less than, I think, £150,000.

    I just discovered that in Austria, you need to have €35,000 just to start a company (half in cash, half as a liability). It made be profoundly grateful to be operating in the UK.

    Stay out of the way? Yes. Make it easier to file online? Yes.

    But I’m really not sure I agree with you on many of your “Byzantine” allegations (and I’m one who generally moans about red-tape).

  • Bruce Greig

    +1 to everyone who has pointed out that the UK is *way* easier to do business in than most other countries.

    And complaining about being pestered for your Annual Return (“363”) looks amateurish. Revealing who your shareholders are is part of the bargain you strike when you incorporate. Your company gets limited liability, but in return anyone dealing with your company has a right to know who the shareholders are. That’s the deal.

  • Mike Seery

    At least there’s some good come from this post – there’s some great constructive advice in the replies.

  • azeem

    Hey guys, great discussion — sorry i have been quiet, been in a workshop all day.

    One of the things that entrepreneurs do is look at the world and say ‘How can this be different?’ ‘How can this be better?’ ‘Does it have to be this way?’

    If we didn’t then things don’t change.
    Alicia doesn’t change the way publishers manage affiliate networks. Layar doesn’t create new ways of interacting with the world. ERPLY doesn’t provide better ways of addressing the accounting and inventory management.

    Listen to Jonathan Ive when he presents on design and why they worry about pushing the glass right to the edge of the screen. It’s a little thing, but it matters.

    Yes–much of this stuff is easy, but it is not as easy, as say, writing a blog post. It is not as easy as it could be. And it doesn’t make sense for companies of this type–if you were a great designer, you wouldn’t design it that way.

    The point is that the little things get in the way.

    And we can completely see why systems were what they were, maybe. But are they appropriate?

    Do they help or do they hinder? And (as Don Dodge wrote about Google’s goals), should our aspirations be limited to not wanting to change systems and accepting the status quo? Or should we challenge the irritations in our midst?

    Comparisons to other countries are irrelevant.
    The question is: do you want to improve this?
    Can you improve this?

    And wider, should your interaction with a Government be so governmental? (See Companies House database and Land Registry, unavailable on the weekends). Why can’t it be better?

    So you are you happy with the status quo? Or could you improve it?

    • Jand

      Companies House has always been pretty easy to use and its even easier since the new system was implemented in October.

      The UK system is generally thought to be superior to other systems in Europe…….so much so that a load of German companies are incorporated here because its about a tenth of the price than doing it in Germany and the compliance is easy.

      Basically you had a rant….. about some pretty elementary requirements..

    • TM

      Status quo is not that bad… seriously. There are MUCH more important things to worry about or improve if you are really serious about entrepreneurship.

      BTW, workshop?!! WTF?!

      • azeem

        Workshop = figuring out a new interface between or machine learning and web dev teams. meeting. stand up call it what you will

  • Heero

    A shocking article for me, since we just kicked of our startup in England – for the better, more supporting surrounding.

    It didn’t work in Germany at all, bureaucracy and especially tax laws choke you out before you earn the first Cent.

    Well, we will see what happens next…

  • » Blog Archive » I dislike “Startups” in the UK

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  • Matthew Evans

    Hey Azeem,

    I don’t think any of this has really changed since the days of esouk in the late 90s. Sounds like you’ve just had to go through it all again in the recent startup and have had a nice refresher on the level of help you get.

    One of the best lessons we learnt starting solid state group was that we were doing the paperwork ourselves well after the point we needed too. Getting someone in to do all the admin, sending invoices and calling in debt was one of the best moves we made, freeing us up to get on with selling and being creative.

    I completely agree with you about the EMI process though. That is so overly complex it’s not funny. There is a massive gap in the market for a cheat sheet website for those EMI applications. Not fun.



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