Business Red Tape and Bureaucracy Awards Put Chancellor at Number One

Nearly 40% of small business owners blame the Chancellor of the Exchequer for the increasing burden of red tape in the UK. A recent poll commissioned by online accounting software firm KashFlow has revealed the constraints and worries that increasing amounts of red tape has had on small businesses around the UK.

In the first ever Red Tape and Bureaucracy Awards the Chancellor of the Exchequer is today revealed to be the person that the majority of small business owners and accountants blame for increasing red tape in the UK.

 Of the business owners and accountants polled nearly 40%1, blamed the Chancellor for increasing red tape, closely followed by 23% who blamed the European Union and 21% who blamed the former Chancellor and now Prime Minister, Gordon Brown.

 Online accounting software firm, KashFlow, has revealed the results of their online poll, aimed at accountants and small businesses, which divulges the effects that ever-increasing amounts of red tape has had on their business.

 The results from the KashFlow poll, representing the opinions of 680 UK small business owners and accountants, revealed some worrying statistics; confirming the ongoing concern that additional red tape is costing small companies time, money and stress.

 Over 75% of respondents stated that red tape has affected on their company and of this 75%, 95% of accountants said this was due to ‘money laundering paperwork’.

 Speaking about the findings the Managing Director of KashFlow, Duane Jackson said,

 “At present, there seems to be a ‘one size fits all’ approach, but it is argued by many that smaller firms simply do not have the capabilities to comply with all regulations as easily as bigger firms.

 “Smaller businesses may not have the appropriate funds or access to accountants, lawyers or human resource professionals. Consequently, staff members and managers are being lumbered with the burden of processing VAT and researching new rules and regulations regarding health and safety, number of work hours permitted, non smoking rules and so on… Added to this, is the pressure of constantly updating this information, just to avoid a hefty fine for non-compliance”.

 Constant promises from the Government to cut down on red tape and legislation for businesses have not, according to participants, been delivered. 94% of respondents felt that there was now even more red tape than there was 10 years ago, suggesting that attempts to cut down on legislation have in fact had the complete opposite effect.

 When looking at the results of who is to blame for all the red tape, the opinions are supported by The Burdens Barometer 20082, commissioned by The British Chambers of Commerce; revealing that the cost of regulation imposed on businesses has increased dramatically from £10 billion in 2001 to £66billion today.

 The Federation for Small Businesses (FSB) was found to be the most successful when it comes to fighting against red tape, according to 32.4% of respondents. In a study conducted by the FSB3, they found that small businesses wasted between 7 and 20 hours per week on red tape, costing them an estimated £4,127.76 – £11,793.67 per year, according to the Office of National Statistics average hourly rate of pay. 

 Despite the majority of respondents (75.8%) feeling let down by the current system, admitting that red tape is preventing them from expanding and in some cases is causing redundancies, it is still felt that the UK has fewer barriers with regards to starting up a new business than the rest of Europe.

 This opinion is shared by 79.4% of respondents. The problem here however, is that the UK has a high number of sole traders, who are too restricted to allow business growth and consequently, it is thought by some, preventing the growth of the whole economy.

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