Red tape has employers in knots

The average small company in the county spends a whopping 14.6 hours each month dealing with government regulations and paperwork.

This figure almost doubles for businesses with more than 11 employees. They spend as much as 26 hours a month on compliance-related paperwork.

Nearly three-quarters of small businesses in Hampshire admit to either reducing the number of people they employ or even avoid hiring more because of the concern over the increased burden of paperwork, according to the survey by Mentor, an advice service from NatWest.

On average, small businesses in the area spend 2.9 hours a month dealing solely with employee-related paperwork, with a fifth admitting to spending more than five hours on employee regulations.

Those firms operating in the hotel and catering sector spend an average of seven hours dealing with employee related paperwork, compared with only 1.3 hours for those in wholesale. The research also shows that the higher the turnover of the business the more time they spend on dealing with government regulations, as those respondents with a turnover of more than £500,000 spend at least 22.5 hours a month. The transport sector reports the largest burden when it comes to regulatory paperwork.

An average business spends 29.1 hours a month and 33 per cent admit to spending between 31 and 50 hours a month completing the necessary paperwork. Taxation, however, is the biggest concern for small firms in Hampshire, with 55 per cent saying that they spent the most time dealing with VAT and 28 per cent dealing with PAYE.

Kevin Dye, NatWest's area business manager for West Solent, said: "The time that it takes to comply with government regulations is clearly a top priority for small businesses in Hampshire, although many agree that the regulations are necessary.

"It is concerning however to see that local small firms are thinking twice about employing more staff, and have even reduced jobs because of the amount of regulation involved."