Thousands more UK businesses are now categorised as “small”, releasing them from reporting requirements and other regulations in a government plan to boost productivity and growth.
Previously, small businesses were presumed exempt from certain regulations if they had less than 50 employees. However, this has now been widened by the government to businesses with less than 500 employees.
The change means an additional 40,000 businesses will be freed from future bureaucracy and the accompanying paperwork that the government says is “expensive and burdensome for all but the largest firms”.
It follows government research that reveals many medium-sized businesses – those with between 50 and 249 employees – spend over 22 staff days per month on average dealing with regulation, and over half of all businesses consider regulation to be a burden to their operation.
The new threshold came into force yesterday (Monday 3rd October) and applies to all new regulations under development as well as those under current and future review, including retained EU laws.
The government will also look at plans to consult in the future on potentially extending the threshold to businesses with 1,000 employees, once the impact of the current extension is known.