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Sharp rise in compliance concerns for UK small businesses PDF Print E-mail
Tuesday, 20 March 2018
Forget the age-old issues late payment or economic volatility: regulation has emerged as the new top concern for growing small businesses in the next six months (28%) – overtaking issues that business owners have more control over, such as retaining business (20%), managing cash flow (26%), or skills gaps and shortages (14%). The proportion of these businesses concerned about compliance and red tape has risen by 9% in the past 18 months – more than any other concern the research tracked.  

The new British Business Barometer research from Hitachi Capital Business Finance suggests too much compliance is having a significant impact on business owners. This was particularly the case among the professional services sectors, with a third (32%) of finance businesses and 35% of law firms saying worries over paperwork were keeping them awake at night – their number one concern. Similarly, concerns about red tape and bureaucracy were now the top concerns for small businesses in the real estate (28%) and medical (26%) sectors.

General Data Protection Regulation, Brexit, gender pay equality, updates to the Criminal Finances Act and the recent scrapping of Employment Tribunal fees have all been issues contributing to a massive increase in paperwork for small businesses over the past months. As a consequence, worries about compliance and red tape have risen significantly in the past 18 months. Across all sectors, one in five small business owners (20%) has current concerns about compliance, up from 15% in 2016.

By contrast, the proportion of small businesses that expressed major concern over economic volatility appear to have stabilised - from 21% 18 months ago to 20% in Q1 2018.

Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance comments, “Over the past 18 months, the mountain of paperwork for small businesses has become taller, and the fact this is now their chief concern ahead of others issues gives some insight as to what they are facing on a day-to-day basis. With Brexit, there is likely to be tighter control on regulation for many businesses in and outside the UK.

“But, the huge positive to draw is that it is clearly not denting small business confidence. This quarter, two in five enterprises anticipate growth in the next six months – a slight rise from the previous quarter and the quarter before. Our research also shows that more small businesses plan to hire staff, invest in new equipment and expand into new markets or overseas. Despite a hike in administrative work, SMEs are still focused on the pursuit of growth – and we’re there to help them achieve it.”
 

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