Away with the Red Tape for Young Business Owners

Over half of all Danish businesses do not employ any staff and the number of one-man businesses is growing. The Danish Commerce and Companies Agency (DCCA) in collaboration with the Danish Tax and Customs Administration (SKAT), wanted to find out how the public sector could best help this group of people.

”The University of Zanzibar’s website is easier to understand than the Danish tax authority. When I need to check my annual tax return, for example, I can only do it on the “Personal” system, and I’ve never actually understood why they’ve organized it that way”

Student, Danish Design School, 23 years

William is 23-years old and has started his own design company while still studying at design school.
He thinks it is hard to understand under which circumstances government considers him a business owner and when he is considers a regular citizen. On the tax authority’s website he has to log in to both the Business and the People systems in order to correctly submit his tax return.
When young citizens seize the opportunity to become business owners they meet a series of requirements from the public sector that do not match their professional competences or interests. Because of this, doubt and uncertainty dog them. Since the young business owners find the requirements difficult to understand, they question the fairness of the many fines and sanctions imposed on them, e.g. for late VAT payments or incorrectly filled out annual tax returns.

MindLab interviewed

• Seven business owners under the age of 30, who do not employ any staff. All of them are from the creative sectors – e.g. film photography, design and animation.
• External experts, including experts from the Danish Union of Journalists and Nordea Bank.

The most important results

• Working in cooperation with staff from the Danish Tax and Customs Administration (SKAT) and Danish Commerce and Companies Agency (DCCA), four specific solutions were developed.

What MindLab did

The young business owners were interviewed, the basis of which was their experiences with their last tax returns and VAT registrations. It was clearly established that as the young business owners went about setting up and operating their businesses, they became very surprised by the volume and complexity of the requirements made by the public sector. For example, a young designer is often unsure about what is tax deductible. He has just completed a textile project at his Design School and hopes he can sell his design to a clothing company – but are all of those expensive design pens tax-deductible?

The interviews and observations were eye-openers for staff from the Danish Tax and Customs Administration (SKAT) and Danish Commerce and Companies Agency (DCCA). An overall picture emerged of a group of business owners who had real difficulties in navigating their way around the existing system.
Staff from the Danish Tax and Customs Administration (SKAT) and the Danish Commerce and Companies Agency (DCCA) cooperated with MindLab and transformed their insights into single-business owners into specific initiatives. The initiatives were transformed into prototypes, such as storyboards, which helped to illustrate the new process. The prototypes were then used with the business owners and further refined.