Research carried out by business lobby and support group the Forum of Private Business (FPB) found that small recession-hit restaurateurs and hoteliers with between 10-50 employees spend around 41 hours of valuable time every month on paperwork, while those with up to 249 workers can take 131 hours.
The survey of members from the FPB also found that the more direct costs to small to medium sized businesses (SMEs) complying with health and safety legislation alone stacked up to £606m each year, while the spend on observing employment legislation (dismissals, redundancies, maternity, disciplinary) reached £687m.
The cost to the industry when complying with waste and the environment legislation was thought to be £318m, equality and diversity £149m, tax £510m, and building and property £284m.
Matt Goodman, FPB policy representative, said: “Our research shows that complying with red tape remains one of the major cost burdens facing smaller businesses, swallowing up valuable time and money that could be used more profitably elsewhere.
“At a time when protecting both workers and businesses should be a priority, regulations are increasingly burdensome as businesses take on more staff.”
Earlier this year the Government announced a lifeline scheme for struggling small businesses, in which it would guarantee up to £20bn of loans as part of a support package to address their cashflow.