Red tape costs UK small businesses £16.8bn, survey claims

UK small businesses have claimed red tape is costing them up to £16.8bn a year and they are missing out on nearly £30bn of business opportunities because of the time and resources they spend dealing with regulation. The Forum of Private Business (FPB), which conducted the research, c

UK small businesses have claimed red tape is costing them up to £16.8bn a year and they are missing out on nearly £30bn of business opportunities because of the time and resources they spend dealing with regulation.

The Forum of Private Business (FPB), which conducted the research, claimed the results showed the UK was "heading in the wrong direction as far as reducing regulation for small business owners is concerned".

The research found the cost of compliance was only 1% higher than in 2009, but the FPB argued the increase was greater "in real terms because economic activity, which drives the need for compliance, has shrunk significantly" since the previous survey.

Administering tax was identified as the top regulatory burden in 2011 at a cost of £5.1bn, followed by employment law on £4.2bn. Third was health and safety law compliance which cost £3.8bn. In 2009, employment law was top followed by health and safety and tax was third.

As many as 84% of those surveyed said they were spending more time complying with legislation and 67% were spending more money on external consultants to avoid legal pitfalls - 21% of FPB members said the time and cost spent on compliance had affected their business performance.

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