Red Tape still giving business the hump

Red tape is still tying down UK business according to a new survey by the Institute of Directors (IoD). Petty rules and regulations, incompetence and misplaced 'assistance' continue to hinder business expansion and job creation, members of the IoD reveal in a series of candid case studies.

Forty-five businesses reveal just how difficult life can be on the bureaucratic front line. Cases of unnecessary and costly red tape and burdensome bureaucracy emerge across all facets of business activity from employment law, to planning, to health and safety rules.

Examples include:

• A Herts building firm ordered to install a speed hump within a much-needed housing development by the local Council, and then charged £12,000 for the Council to 'supervise'. Actual cost of constructing speed hump - £3,000!
  
• A Lincolnshire manufacturer forced to replace equipment to comply with latest EU standards, but told by supplier that replacement equipment not as good as that which has been replaced!
  
• A West Midlands exporter now has to liaise with its local Business Link when negotiating overseas contracts. Previously done directly through British Embassy in the country concerned. Business Link of course charges for this service. Extra layer of bureaucracy slows down whole process.

James Walsh, Head of Regulatory Affairs at the IoD, said: "These case studies speak volumes about the difficulties of doing business in Britain today. For many companies, red tape makes the difference between expanding the business and standing still.

"The Government has made some encouraging noises about getting to grips with red tape, but we need practical action. These case studies show where some of the key problems lie. We look forward to working with the Government to set business free."

Family-friendly

The case studies contained in the report cover regulations issued from central government departments and agencies, the European Commission and local government. A number of case studies highlight the difficulties that employers face in adjusting to new 'family-friendly' employment laws.

James Walsh, said: "Employment regulations crop up time and again in this red tape dossier. The Government should consider giving business a time-out until at least 2010 before it presses ahead with further extensions of employee rights on issues such as flexible working, maternity pay and parental leave."

Taxation

Chapter 10 of the case study report deals with taxation issues.

IoD members' complaints about taxation fall principally into two categories: complexity; and difficulty in obtaining clear guidance and information from the Inland Revenue and Customs and Excise.

The IOD's action points suggest:

• Customs & Excise should review its procedures for informing businesses of changes in duty rates. Simply posting a notice on the C&E website is not enough. Would it be possible to establish a simple system - perhaps based on e-mail alerts - that would allow importers to
  receive updates on duty changes for the products and countries in which they have an
  interest?
  
• The Inland Revenue should consider whether there is scope for simplifying and reducing the number of P.11.D forms that companies must complete.
  
• Customs & Excise should review the operation of the Special Imports VAT Accounting [SIVA] scheme. In particular, C&E should ensure that VAT deferment levels are set appropriately in order to ensure that companies are not required to produce banker's drafts for nil amounts.

The full IOD report is available for download here (in pdf): In their own words - Red Tape case studies