Small firms fear threat of red tape

Government plans to cut red tape for small business could be reversed by new employment laws such as the working time directive, business leaders were warning last week. Trade and industry secretary Stephen Byers promised a `presumption against regulation’ in future legislation at the British Chambers of Commerce (BCC) conference in Glasgow. `Regulation will only […]

Government plans to cut red tape for small business could be reversed by new employment laws such as the working time directive, business leaders were warning last week.

Trade and industry secretary Stephen Byers promised a `presumption against regulation’ in future legislation at the British Chambers of Commerce (BCC) conference in Glasgow. `Regulation will only be introduced where absolutely necessary and where all other avenues have been pursued,’ he said, proposing further changes to the directive and an increase in the audit threshold.

But Tony Hall, managing director of LPMS, which runs a helpline for the BCC, said small businesses were becoming increasingly worried about the minimum wage and employment relations bill. `The number of calls we’ve had has gone through the roof over the past three months,’ he said.

Byers admitted guidance on the directive had been difficult to understand. He said new guidance would make it clear that most workers would not need to keep records of hours worked and most companies already held enough information.

The threshold at which companies must have their accounts audited independently would be raised from £350,000 to a new threshold that could be as high as the EU maximum of £4.2m.

The Federation of Small Businesses estimated that a company with £1m turnover would save £5,000 annually if the audit requirement was lifted. Raising the threshold to £2m would help 150,000 companies.

Business bodies reacted cautiously, citing previous broken promises to cut red tape. `In business actions count, not words,’ said CBI president Sir Clive Thompson.