SMEs HIT WITH "SOARING" COMPLIANCE COSTS

The cost of compliance is continuing to soar for SMEs, the Forum of Private Business has claimed, as reported by EN for Business this morning.

According to the lobby group, SMEs pay substantially more on compliance than they did two years ago.

It put the total cost of compliance at more than £18.2bn, which is an 8.5 per cent rise compared to figures from 2011.

In addition, companies are paying 11 per cent more to external providers of payroll and tax support compared with two years ago. This is thought to be as a result of the introduction of Real Time Information (RTI), which was introduced in April.

Robert Downes, the forum’s policy adviser, said, “Our research shows little has changed in terms of what’s costing small business the most for compliance costs. The stand-out surprise though has to be the huge increase in spend on external contractors.

“We believe this is largely down to RTI, and firms having to pay a payroll specialist to manage their employees’ PAYE bills, but by contrast businesses are paying out slightly less on internal compliance managed in-house.

“The logic here seems to be to pay an expert to do a job they can no longer do themselves, for whatever reason that may be.”

Before RTI was launched, HM Revenue & Customs, anticipated the cost to small businesses to be around £20 million, but the forum said this figure is more than double that at £311 million.

Read Kirsty Hewitt’s full story here