Endless red tape has long been recognised as a major challenge to small businesses and particularly to tourism related enterprise where a typical business not only lacks the economies of scale to soften the costs of regulatory compliance, but is also labour intensive and burdened with the labyrinth of regulation that accompanies this onerous responsibility.

The Government’s Tourism Policy makes reference to its aim to reduce the Red Tape although  we now see hotels, holiday parks and other venues may face dramatic increases in costs for  ‘specially featured entertainment’ such as fairs, festivals and functions where a DJ plays recorded music,  if proposals by the music licensing agency, PPL, go ahead.

However, if there is one area of red tape that provides the majority of headaches for small business, it’s employing staff to whom you have a wide range of legal obligations.  You have to consider seasonal, part-time and fulltime employment status, tax calculations and PAYE compliance, sick pay, maternity pay, benefit agencies, child support, tax credits, end-of-year returns and  automated payments  – all this against a backdrop of fast–changing employment law, rising penalties for non-compliance and the possibility of random tax investigations.

Outsourcing payroll is a real option for many, especially for owner/managers where their time is much better taken up with growing the business and making more profit.  Outsourcing payroll also ensures that a business will meet its legal obligations on time eliminating the need for specialist personnel, dedicated software and training to keep up to date with the latest changes in the law.  It can also reduce the risk of confidential data being read by unauthorised eyes and provide a disaster recovery service.

An outsourced payroll service can also provide a wide range of reports enabling a business to plan and perhaps design tax-efficient remuneration packages and employee incentives or share schemes.

The Government is committed to reducing red tape but it appears that, in order to do so, it needs to create more.  Until we can see a real clearing of the ‘red tape’ broom cupboard, businesses must find ways of making better use of their time to improve productivity and profitability.

I was interested to read two recent comments on the subject.   A tourism industry survey found “a critical issue for almost a half of respondents was the need to modify government regulation, to facilitate investment and development. Aside from funding for marketing and promotions, this was the most pressing concern for the tourism and events industry.”

Another said: “Red tape is a major problem across the board, from B&Bs to up market hotels, tour operators, airport shuttle services and other transport companies, travel agents, and conferencing and events management firms.”

You may have heard similar remarks before but what interested me is the first one comes from an Australian Tourism Conference and the second from a South African newspaper report.

You are not alone.

For further information:
 
John Rowe, Partner, Francis Clark LLP.
Telephone:  01803 320100

Francis Clark has offices in Exeter, Plymouth, Salisbury, Taunton, Tavistock, Torquay and Truro. Francis Clark is the winner of the ‘Auditor of the Year - Mid Tier’ in the National Financial Director’s Excellence Awards 2011, and LexisNexis Best General Tax Practice Award 2009. More information is available by logging on atwww.francisclark.co.uk