Regulations scrapped

Red tape slashed for thousands of SMEs

Jacob Rees-Mogg
Jacob Rees-Mogg: cutting burden of form-filling

More SMEs will be exempt from a weight of business regulations – with immediate effect – under changes announced by Prime Minister Liz Truss and Business Secretary Jacob Rees-Mogg.

Thousands of the UK’s fastest-growing firms will be released from reporting requirements and other rules to improve efficiency and cut costs.

Currently, small businesses are presumed to be exempt from certain regulations.

However, many medium sized businesses – those with between 50 and 249 employees – say they are spending more than 22 staff days per month on average dealing with regulation, and over half of all businesses consider regulation to be a burden to their operation.

The Prime Minister has announced that these exemptions will be widened to businesses with fewer than 500 employees.

It means an additional 40,000 businesses will be freed from future bureaucracy and the accompanying paperwork that is considered expensive and burdensome for all but the largest firms.

The exemption will be applied in a proportionate way to ensure workers’ rights and other standards will be protected, while at the same time reducing the burden for growing businesses.

Regulatory exemptions are often granted for SMEs, which the EU defines at below 250 employees. However, the post-Brexit environment means the UK is now free to take its own approach and exempt more businesses.

The changed threshold will apply from Monday 3 October to all new regulations under development as well as those under current and future review, including retained EU laws.

The Government will also look at plans to consult on potentially extending the threshold to businesses with 1,000 employees, once the impact on the current extension is known.

It said this is the first step in a package of reforms to ensure UK business regulation works for the UK economy.

“The reforms will harness the freedoms the UK has since leaving the EU to remove bureaucratic and burdensome regulations on businesses, while streamlining and making it easier for them to comply with existing rules, ultimately saving them valuable time and money” according to a government statement.

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