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Gordon Brown has announced that there will be a simplification of the administrative and tax burdens placed on small businesses. This could not come soon enough according to the findings from a recent Federation of Master Builders (FMB) survey.
In response to the question 'What one issue most threatens the future of your business?' 45% sited red tape and bureaucracy as their main threat. When asked how much time was spent on administration each week 42% spend more than two days per week, with 33% spending 1-2 days. This response is unsurprising in view of the increased legislation affecting business in general in recent years.
This increased legislation has added considerably to the time and effort spent on paperwork. Although the aims of the legislation is to be applauded, much of it is intended for large organisations, and not the small and medium sized businesses which make up the majority of the building industry. These smaller businesses lack the in-house specialists that large firms have to deal with increased and ongoing amounts of paperwork and they can ill-afford the time taken away from carrying out their day-to-day business.
In addition to this, the construction industry has its own specific bureaucratic headache in the form of the Construction Industry Scheme. This is generally considered to be top heavy in terms of paperwork and also negative in its affect on the taxation of sub-contractors, making it not only a burden to administer but also harmful to business. This is in addition to ever increasing employment responsibilities that are also shrouded in red tape.
Ian Davis, Director General of the FMB, commented, "The survey results show that the back bone of the building industry, the small and medium sized firm, is being seriously threatened by the burden of red tape. The amount of time and resources spent on administration is grossly out of proportion to the activities of a smaller building company, however once the effect of the rogue trader is brought into the equation, it becomes wholly unacceptable. Rogue traders simply ignore all forms of legislation, be they tax, health and safety, or employment related. This enables them to undercut the reputable builder on price, which is often the deciding issue for potential clients. These new proposals are to be welcomed providing they are quickly implemented and are effective in practice."
"Not so long ago the ring of a mobile phone on a building site was rare. Now the mobile is an essential communications tool for builders. In a similar way the internet will become an important business resource", says Mr Davis.
"The internet is here to stay. Its use and impact will continue to increase. Builders would be wise to log on sooner rather than later."
First posted: 27 June 2001. Last modified: 27 June 2001.
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