Small businesses held back by red tape
The growth of small businesses is being held back by administration associated with workplace pensions, tax and employment law.
According to research conducted by the Federation of Small Business (FSB), small business owners spend 33 hours every months on internal administration.
It surveyed 1,650 small business owners and found that 55% thought that red tape was preventing them from focussing on the business' primary purpose. Over three-quarters said that they spent more time that they would like on business compliance, with accounting tasks reported as most onerous (taking on average almost seven hours a month). Meanwhile, the small businesses said they spend over three hours on tax and almost 2.5 hours on health and safety a month.
FSB commercial director Dave Stallon said: "The Government has pledged to remove £10b worth of red tape over the course of this Parliament. 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 Red Tape challenge, the ‘one-in-two-out' approach to new regulations, and steps to boost the regulatory Policy Committee are all moves in the right direction."
The FSB found that in total businesses spend £3,600 on advice on tax compliance, which is likely to increase after the introduction of requirements to keep digital tax records which must be reported every quarter.
Stallon added: "It is a common frustration amongst owners of smaller companies that they are unable to find the time to work on their real business activities, because they are too busy completing administrative tasks, however essential they are. These businesses need expert support they can trust in order to minimise time dedicated to business administration. If they do this, they can maximise the time spent making their businesses bigger, better and more profitable."
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