Small businesses are particularly affected by over-regulation

24 February 2010 04:05:14

A spokesman from the Institute of Directors (IoD) has said that government regulation is particularly inconveniencing for small businesses.

Head of regulation and enterprise policy at the IoD Alexander Ehmann stated that due to a lack of extra staff, as compared with big businesses, administrative regulation would "fall disproportionately" on small businesses.

He also added that while some regulations did prove beneficial, the official red tape and form-filling procedures did not cover much of the administration needed by UK businesses.

In the IoD's report, 'The SME Glass Ceiling: Growth Obstacles in 2007', around 42 per cent of all respondents said that they felt regulation was holding back their business.

"It has been proven that the administrative burden of regulation does fall disproportionately on smaller businesses because the inspection regimes and the form-filling falls as much on them as it does on larger businesses who have extra staff - and therefore a built-in capability to deal with the compliance issues," said Mr Ehmann.

Recent statistics released by the Department of Business, Enterprise and Regulatory Reform show that the number of small to medium-sized businesses has dropped, while the number of sole trader businesses has risen.