Red tape is drowning SMEs

Britain’s small business are spending more money and time on red tape than they did two years ago, according to research revealed on Tuesday.

Although that is only a one per cent increase from 2009, Jane Bennett, head of campaigns at Knutsford, a forum of Private Businesses, said the increase is greater in real terms because of reduced economic activity. The total costs of £16.8million works out that every firm spends £14,200 a year just on red tape alone.

A poll by the Forum also found that 67 per cent of businesses had to bring in external consultants to deal with all the regulations.

Administering tax has become the top factor for red tape, costing £5.1billion a year. That shows a remarkable increase in administrative tax as back in 2009 it was employment law which cost the most in red tape followed by health and safety.

With one in five businesses saying they are performing poorer, 18 per cent admitting lack of motivation alongside health problem, the finding are a real kick in the teeth for the governments claims that things are improving slowly.