The rising cost of red tape

Small businesses are spending a staggering £16.8 billion a year on complying with regulations, according to latest findings.

The research, carried out by the Forum of Private Business, reports that despite Government efforts to reduce red tape, 84% of companies have spent more time complying with legislation since 2009.

Additionally, 67% of respondents are being forced to spend more money on external consultants to help them avoid legal pitfalls.

According to the survey, administering tax has become the top regulatory burden for small business owners. Tax-related regulation was deemed to be the most costly area of red tape, leaving smaller employers with a bill of £5.1 billion per year.

Employment law was second at £4.2 billion, followed by health and safety law at £3.8 billion.