Committee publication · Correspondence · 13 January 2026
Letter from the Minister for Small Businesses and Economic Transformation relating to the evidence session on 25 November on small business strategy, 5 January 2026
From: Business and Trade Committee
Inquiry: Small business strategy
Summary
Minister Blair McDougall responds to eight questions from the Business and Trade Committee Chair following McDougall's 25 November evidence session on small business strategy. The letter addresses Project Bank Accounts guidance refresh, VAT threshold bunching data corrections, SME procurement targets, business rates relief, the Business Growth Service user metrics (127k users, 16k personalised guides since July launch), and anti-phoenixism measures including a new £25 million Abusive Phoenixism Taskforce announced in the November Budget.
Key findings
- Cabinet Office is refreshing Project Bank Account guidance; policy remains unchanged requiring their use unless compelling reasons exist not to
- VAT bunching effect clarification: 0.5% figure applies to total businesses including VAT-registered; OBR 2023 analysis shows bunching at 0.4–0.75% range
- No single government-wide SME procurement target; Cabinet Office policy requires individual departments to set three-year direct SME spending targets by March 2028
- Business Growth Service launched July 2024 with 127,000 domestic users and 16,000 personalised guides; comprehensive monitoring plan in development for 2026
- £25 million Abusive Phoenixism Taskforce announced in November Budget; Companies House and Insolvency Service expanded enforcement teams; corporate civil enforcement regime under review
Tone
ProceduralTopics
Key actors
Blair McDougall MP, Liam Byrne MP, Cabinet Office, HM Treasury, Companies House, Insolvency Service, Department for Business and Trade
Notable line
“£25 million investment over five years to establish an ' Abusive Phoenixism Taskforce ' within the Insolvency Service to tackle rogue directors.”
Key Quotes
“Pro- ject Bank Accounts should be used unless there are compelling reasons not to.”
“The 0.5% refers to total businesses, including self-employed and those unincorpo- rated, and includes those registered for VAT.”
“It has already seen over 127k domestic users since launch generating over 16k per- sonalised guides outlining our offers within the Business Growth Service based on sector and location.”
“The G overnment recognises the impact the abuse of 'phoenixism' has on the economy, undermining fair competition and harming creditors, employees …”
“… both the Insolvency Service and Companies House have significantly expanded their intelligence, investigation, and enforcement teams.”
Source · parliament.uk record ↗