With the Autumn Budget looming ominously on the horizon, Rachel Reeves seems keen to build some goodwill with businesses ahead of some likely tax hikes.
Part of this is a pledge to launch a blitz on red tape that she believes holds businesses back from innovation and growth.
As a business owner, you should know what is set to be axed and how to manage the changes to ensure that you stay profitable and do not fall into noncompliance.
What red tape is being scrapped for businesses?
The Chancellor seeks to remove what she regards as pointless paperwork and needless form-filling that prevents small businesses from getting on with things.
Specifically, the business blitz includes:
- Increasing size thresholds for corporate reporting and cutting duplicative requirements, meaning lighter-touch requirements for up to 44,000 medium-sized private companies and around 7,000 subsidiary companies, who will no longer be required to produce Strategic Reports.
- Removing the need for any company to submit a Directors’ Report to Companies House.
- Digital verification of planning documents, speeding up approvals for local projects.
- An online register of underground pipes and cables to prevent length and unnecessary delays caused by accidents.
- Less frequent data returns for thousands of banks, insurers and asset managers, with the Financial Conduct Authority scrapping lower-value returns and the Prudential Regulation Authority cutting the number of times firms need to update financial reports.
The Chancellor has also set her sights on Mergers and Acquisitions (M&A).
She wants to streamline the process by creating regular reviews of market remedies for deals.
The board committee structure that this introduces will serve as a replacement for the Competition and Markets Authority’s (CMA) panel decision-making system for investigations.
Reviews into whether M&A deals threaten to limit competition will be conducted in-house by the CMA rather than by an independent group of experts.
Given that these changes are quite transformative, they cannot be enacted by the Chancellor alone but will need to undergo consultation and will require new legislation.
Should a public consultation begin, we will be sure to make you aware of it so that you can discover more and give your input into the decision-making process.
Will businesses actually benefit from scrapping red tape?
Theoretically, it is possible that the changing of bureaucracy could result in smoother growth strategies and be beneficial to businesses.
That ultimately depends on how effective any new systems end up being and the outcomes of any consultation.
We recently observed the disruption that was caused to local councils as they suffered from poor audits following the scrapping of regulations for auditors.
There may be a concern that improper cuts in the wrong place could see businesses operate without valuable guardrails for the sake of perceived efficiency.
The best thing that businesses can do in this situation is to seek professional support and guidance.
Even as regulations may change, our team of accountants can help your business maintain best practices so that you can benefit from any newly opened routes to growth.
We want to ensure that any changes do end up being a positive for your business so we can advise you on the best strategies to utilise.
Scrapping regulation should not mean becoming reckless with business practices or finances as these things can undercut growth and lead to problems further down the line.
