Five tips to cut the cost of regulatory compliance

By Carina Perkins contact

- Last updated on GMT

Complying with regulatory changes can be costly, but these tips could help you minimise the impact of red tape
Complying with regulatory changes can be costly, but these tips could help you minimise the impact of red tape

Related tags: Cost

The Forum for Private Business has published advice which could help small- and medium-sized hospitality businesses cut the cost of complying with regulatory changes.

A recent report from the Forum​ revealed that the average micro, small and medium-sized employer has seen their annual compliance bill rise £713 in 2014, with firms that have fewer than nine employees facing compliance costs equivalent to £164 per employee - almost seven times the cost for companies with 50 or more workers.

Most of this increase is a result of external costs relating to the need to implement Real Time Information (RTI) and pension auto-enrolment​.

Hospitality businesses have been hit particularly hard by these changes due to its high proportion of temporary and seasonal staff. Additionally, the industry faces sector specific compliance costs such food allergy labelling​.

“Staying ahead of the changes to rules and regulations is something that cannot be ignored and the consequences and prove even more costly,” the Forum said.

In a bid to help small businesses keep costs down, Jo Eccles, business adviser at the Forum of Private Business, has produced five top tips to help employers minimise the monetary strain of keeping up with red tape.
 

Five top tips for reducing compliance costs

1. Be prepared (and prepare early)

be-prepared

Eccles says that it pays to prepare well in advance for law changes, particularly major ones such as pension auto-enrolment. 

"It pays to prepare well in advance. While you cannot escape the inevitable costs that will be involved you can keep these down and reduce the impact on your business if you do your homework and budget carefully," she explained.

"Getting the right software in place is just one area where you could make real savings, as many major payroll package providers will include updates for big changes such as RTI and auto enrolment as standard."

2.  Keep up to date

up-to-date

Compliance does not just cost money, it also costs time. According to a Forum survey, the time needed to understand and implement regulatory changes is having the biggest impact on small businesses, costing UK SMEs a total of £38.85bn in lost opportunities.

"If staying up to date with the latest changes is the main issue for you, it pays to identify one or two trusted sources of information that will ensure that you are aware of all the law changes and key dates well before they happen," advised Eccles.

3. Take advice then act

advice

Although hiring lawyers and consultants to help with compliance can be costly, the cost of falling foul of the law can be even higher. So get the right advice and follow it.

"With the average employment tribunal costs in the region of £9,000 and health and safety penalty £16,730 it pays to seek advice to ensure to stay on the right side of the law," Eccles said.

"You should also ensure that whatever source you decide to go with is insured to protect you should the worst happen."

4. Shop around

You can also save money by shopping around for outsourced compliance services.

"Quite often you may find that you can find combined packages that provide employment law, health and safety and contract advice with the extra piece of mind of insurance cover," explained Eccles.

"These could be a lot more cost effective than looking to pay a combination of lawyers and individual consultants."

5. Delegate

delegate

Finally, don't feel that you have to manage all of your legal compliance by yourself. Eccles recommends sharing some responsibility with others that you trust in your business.

"You may want to appoint a Health and Safety Officer or someone in charge of HR. Delegating doesn’t mean you are no longer responsible, but it could free up some of your valuable time for you to concentrate on what you do business – growing you business," she said.

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