Small biz overburdened with red tape – FSB » SMEInsider

Small biz overburdened with red tape – FSB

A new survey has revealed that UK small business owners spend an average of four days per month on internal business administration, while 55% believe the amount of admin they face is stunting the growth of their companies.

In addition, a worrying 67% of owners said they felt their administrative burden was playing a major role in stopping them from focusing on the primary purpose of their business, according to asurvey published this week by the Federation of Small Businesses (FSB).

FSB commercial director Dave Stallon said: “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.”

Earlier this year the FSB called on the government to include the “onerous” tax system in its review of red tape.


Excessive compliance burden

A deeper look at the survey shows that 76% of small business are spending more time than they feel is necessary on  compliance. Specifically, that meant dealing with issues including tax, workplace pensions and employment law as well as insurance, accounting and health and safety matters.

In practice, that means that the average SME small business manager spends only eight hours and 50 minutes on average per month on developing new business, a figure that represents around one-quarter of the more than 33-plus hours they spend on admin.

Stallon also lamented the lack of action on red tape: “The Government has pledged to remove £10bn 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.”

  • michael huxley

    How is this red tape? It is what all business owners do to record and control their business.
    Tax- everyone has to pay it so it is sensible to keep good records to understand you financial position. The same records are then suitable for tax purposes.
    Insurance – most sensible businesses would do it to protect themselves. The compulsory one is Employers’ insurance which was made compulsory to protect employees from those owners who didn’t bother.
    Workplace pensions- why shouldn’t all employees have pensions with a contribution from their employer
    health and safety – for the owner as well as employees, customers and the public.
    All red tape, regulations, laws etc are there to protect everyone from the unscrupulous.
    Everyone has to abide by them so it is a common playing field. Society cannot exist without rules.
    If you don’t like doing it, use the Tim to earn more and pay someone else to do it – a virtual administrator or bookkeeper.

  • This blog covers a very important issue in relation to small business owners. HMRC are getting closer to small business owners and creating barriers for accountants to better support their clients and increasing prices as a result. Small business owners will have to change the way they work in order to free up time to develop business. This can be done through technology with intuitive, simple tools to manage the day to day activities, followed up by a seamless integration to fulfil compliance requirements. The existing service providers caught in the middle, such as insurance providers and accountants, will also need to change their working practise and offer more support services to clients at a human to human level and not focused on the tasks that can be done through software. We are about to see some significant changes that will certainly benefit small businesses now and into the future.