Business development · 19 May 2016

How red tape is costing British small firm leaders time and money

red tape
Admin takes up 33 hours each month but costs 14, 000 a year to avoid
Over 50 per cent of UK small business owners think the burden of red tape is holding back their firm’s growth prospects, according to new research carried out by the Federation of Small Businesses (FSB).

The survey also revealed that small firm leaders spend more than 33 hours each month on carrying out administrative tasks with employees carrying out a further 70 hours of admin work.

More than three-quarters of those questioned admitted to spending more time than they wanted to on compliance-related tasks, employment law, health and safety and tax issues.

Dave Stallon, the FSB’s commercial director, said: The Government has pledged to remove 10bn worth of red tape over the course of this parliament. The FSB welcomes this focus on deregulation, which should free up small business owners to spend more time doing business and creating economic growth.

initiatives like the cutting red tape programme, the one-in-three-out? approach to new regulations, and steps to boost the regulatory policy committee are all moves in the right direction.

The Enterprise Act which received Royal Assent in May 2016 contained a plethora of measures intended to reduce bureaucracy, including an extension to the Primary Authority scheme which allows small businesses to deal with just one council when it comes to regulatory issues.

Those who took part in the FSB survey were also questioned about alternative uses for the time they currently spend on admin if the burden were to be reduced. More than three-in-five stated they would spend free hours on new business development something which currently gets allocated just a quarter of the time given over to admin.



Hannah Wilkinson is a reporter for Business Advice. She studied economics and management at Oxford University and prior to joining Business Advice wrote for Kensington and Chelsea Today about business and economics as well as running a tutoring company.

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