The burden of red tape for small businesses is set to be tackled head on after the chancellor announced in his Budget a reduction in the number of regulatory watchdogs from 35 to nine.
The move could place accountants at the heart of filling the advisory vacuum as the reforms see the number of inspection visits to businesses cut by one million. The plans will also cut down on the number of forms that businesses must complete by a quarter.
The changes are driven by a risk-based approach, following recommendations by former BT group FD, Sainsbury’s chairman and chartered accountant Sir Philip Hampton.
Sir Philip said in his report that accountants are currently the most popular source of regulatory advice for small businesses.
It is understood the void could lead to greater demand for advice from professional advisers on how to meet the myriad business regulations.
‘There are mixed opinions on whether the number of inspections should be reduced among businesses,’ said Victoria Jonson, small business policy adviser at ACCA.
‘There will be a role for accountants to provide extra support.’
Separately, Sir Philip said that the Companies Investigation Branch of the DTI, which ‘investigates fraud’ and ‘malpractice’ should be merged with the Insolvency Service Agency.
The new body would ‘take responsibility for promoting better training, and better targeting of investigations and enforcement’.
A spokesman for the Treasury said the regulatory changes would draw on past successes, including the Financial Services Authority and the Financial Reporting Council. He said that the FSA had a ‘very respectable risk assessment framework’ that could be seen as a good approach of how to tackle the recommendations.
Synergies should also be made between Companies House and the new combined HM Revenue and Customs, Sir Philip said.
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