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Single Market Act – EFIP Response

May 11. 2016 | Policy
Single Market Act – EFIP Response

EFIP supports the Single Market Act and would encourage the Commission to pursue policy proposals which improve the operation of the single market for the EU’s smallest businesses.

However EFIP would like to see independent professionals, as well as SMEs, specifically referenced in the rhetoric of the Act.

Independent workers are every bit as vital to the economic recovery as SMEs and the Commission should acknowledge this. Furthermore EFIP would support policies which encourage more work being done to open up European markets to independent professionals and reduce regulatory burden.

About EFIP

The European Forum of Independent Professionals (EFIP) is a collaboration of national associations which represents independent professionals at EU level through targeted research and advocacy.

EFIP is a not-for-profit, non party political organisation. Our mission is to promote the value of independents to the European and national economies and to ensure that independent working is respected as a legitimate alternative to employment.

About Independent Professionals

‘Independent Professionals’ describes those people who are neither employers nor employees but are businesses in their own account. Sometimes referred to as freelancers, contractors, consultants or micro-businesses, Independent Professionals work across a wide breadth of industries, delivering a flexible, knowledge based service to their clients in both the private and public sectors.

They are genuinely self employed and engage with their clients on a business to business basis.

EFIP and the Single Market Act

EFIP strives for the European social and business environment to become more conducive to the independent way of working. To this end, EFIP is broadly supportive of the Single Market Act as it seeks to assist European businesses, including SMEs, to seize the opportunities that exist within the single market. In particular EFIP welcomes those aspects of the Single Market Act which concentrate on the removal of administrative burdens, particularly for the EU’s micro-businesses.

Economic recovery is dependent on the EU’s ability to nurture a flexible labour market. Independent professionals offer such flexibility.

With this in mind, EFIP feels strongly that the Single Market Act should specifically consider how the operation of the single market can be improved for independent professionals.

The proposals highlighted below have been identified as those which directly affect independent workers in the EU.

Although EFIP supports the removal of barriers to growth for business as a whole, our submission to this consultation is exclusively concerned with how the Single Market Act can encourage independent workers to continue to add value to the European economy.

Proposal No 4: The Commission and the Member States will cooperate in continuing to develop the internal market in services on the basis of the ‘mutual evaluation’ process set out in the Services Directive and currently implemented by the Member States and the Commission. In 2011, the Commission will indicate specific measures to this end, including in the business services sector.

EFIP supports the Services Directive and welcomes the move towards the completion of the EU’s internal market.

We particularly welcome the expansion in opportunities for small businesses to trade across the EU. However a great number of independents do still face considerable barriers when seeking to work across borders.

As highly-skilled knowledge workers, independent professionals work in the services sector and many trade across borders within the EU.

The Services Directive should result in increased trading opportunities for independents particularly those who cannot easily test the market in other member states before committing themselves to trading there.

EFIP feels that the Commission must try to consult directly with the Independent Professional community to understand where barriers to expansion across borders remain and how best to remove them.

Proposal No 12The Commission will adopt an action plan for improving SME access to capital markets in 2011. This will include measures to make investors more aware of SMEs, to develop an efficient stock exchanges network or specific regulated markets focussing on SMEs and to make listing and disclosure requirements more adapted to SMEs.

It is important to note that while many SMEs are constantly looking to expand, a great number of independents (though not all) have no desire to expand their business in terms of taking on additional employees.

Rather they are focused on continuing to provide expert services to their clients. There are very successful companies, which operate their business based on a freelancing model i.e. a one-person company.

Partly because they typically do not have several employees, it is often the case that independent professionals are able to start their business without the need for a large capital outlay.

Nevertheless some access to finance for independents can assist them to manage the administrative and accounting burdens which unfortunately come with starting and maintaining a business.

In addition many independents will seek opportunities to attend training courses, the costs of which will be met entirely by themselves.

It is therefore important that the Commission consider access to finance not just for SMEs but also for independents.

Proposal No 13: The Commission will assess the Small Business Act by the end of 2010 with the aims of ensuring that the ‘Think Small First’ principle is implemented in both policy and the legislative procedure in order to closely link the Small Business Act with the Europe 2020 Strategy. 

EFIP supports the Small Business Act. However EFIP would like to see independent workers, as well as SMEs, specifically referenced in the rhetoric of the SBA. Independent workers are every bit as vital to economic recovery as SMEs and the SBA should acknowledge this.

The ‘Think Small First’ principle should apply primarily to independents.

Proposal No 14The Commission will propose a review of the accounting Directives in 2011 to simplify financial reporting obligations and to reduce the administrative burden, especially for SMEs.

EFIP fully supports the Commission’s proposal to simplify financial reporting obligations and to reduce administrative burdens.

In particular EFIP are delighted to note that the Commission has specifically identified that those administrative requirements are especially burdensome for micro-enterprises.

Proposal No 17: After the currently ongoing assessment of European public procurement legislation, and based on wide-ranging consultation, the Commission will make legislative proposals in 2012 at the latest with a view to simplifying and updating the European rules to make the award of contracts more flexible and to enable public contracts to be put to better use in support of other policies.

EFIP welcomes the Commission’s proposal to simplify and update public procurement legislation. Independent professionals should be encouraged to bid for public contracts and indeed are ideally placed to offer value for money for public institutions.

We are aware that there currently exists enormous administrative barriers to independents wishing to bid for public contracts.

EFIP feels strongly that the Commission should consider how such barriers can be removed.

Proposal No 19: The Commission will take steps to improve the coordination of national tax policies, notably by proposing a Directive introducing a common consolidated corporate tax base (CCCTB) in 2011.

The Commission is right to identify disparate tax regimes between member states as a significant obstacle to a fully functioning single market.

Initiatives which help to ease these burdens would be greatly welcomed. Specifically, the introduction of a ‘one-stop shop’ for tax administration could be of great benefit to Europe’s smallest businesses, particularly if it were able to offer high quality advice on dealing with tax issues when working across borders.

Proposal No 20The Commission will publish a new VAT strategy in 2011 on the basis of a Green Paper conducting a fundamental review of the VAT system, planned for 2010.

EFIP is aware that the complexity of the VAT system adds considerable administrative burden for all businesses, especially independents.

Proposal to improve the ease with which small businesses can comply with the VAT requirements across borders would be welcomed.

Proposal No 23: The Commission will further develop regulatory cooperation with its main trading partners, both bilaterally, in the form of regulatory dialogues, and multilaterally, for example within the G20. The twofold objective is to promote regulatory convergence, including promoting equivalence of third-country regimes where possible, and to push for wider adoption of international standards. On this basis it will pursue negotiations for international trade agreements (both multilateral and bilateral) with a focus on both market access and convergence on regulatory issues, particularly for services, IPR and subsidies.

The EU’s efforts to open up its markets beyond its own borders are positive and will create a more competitive market for services within the EU.

However, if such agreements are likely to have a disproportionate or detrimental effect on an individual member state this should be taken into account – all EU members should benefit equally, as has been the driving goal from the EUs inception.

The EU should continue to seek the free supply of services but should ensure that where such agreements are pursued, they do not affect any one member state disproportionately, and do not distort markets.

The EU should examine ways of mitigating these impacts. For example, slower, or phased implementation of agreements, a full consultation process with affected national and EU-wide industry groups, and a thorough impact assessment exercise.