Around 40,000 businesses are now exempt from reporting requirements as the Prime Minister unveils a new plan to boost productivity.
Liz Truss has announced that thousands of the UK’s fastest-growing businesses will be released from existing requirements and other regulations.
Currently, small businesses are presumed to be exempt from certain regulations. However, many medium-sized businesses – those with between 50 and 249 employees – still report that they are spending more than 22 staff days per month on average dealing with regulation. Over half of all businesses consider regulation to be a burden to their operation.
The Prime Minister has announced plans to widen these exemptions to businesses with fewer than 500 employees for future and reviewed regulations, meaning an additional 40,000 businesses will be freed from future bureaucracy and the accompanying paperwork that is 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 as below 250 employees. However, The UK is free to take its own approach and exempt more businesses to those with under 500 employees. The Government can also apply this to retained EU law currently under review, which would not have been possible as part of the EU.
The changed threshold came into force last week for 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 in the future on potentially extending the threshold to businesses with 1,000 employees once the impact of the current extension is known.
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 regulations on businesses, while streamlining and making it easier for them to comply with existing rules, ultimately saving them valuable time and money.