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Regulatory changes affect employment for SMEs: FPB

Simon Watkins

Over half of the Cheshire-based firm’s members also said that the coalition government’s recent employment reforms around recruitment and termination of employment have generally made regulations fairer.

However, only 2 per cent of members believe that the regulatory changes allowed for flexibility, which was one of the government’s key strategic aims.

Specifically, 45 per cent of small businesses thought that the incoming regulatory changes for shared parental leave and the extension to the right to request flexible working would have a negative impact on the way they run their businesses.

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The FPB research also revealed that 75 per cent wanted to see a reduction in the cost of employment, 60 per cent wanted further reductions to the amount of administration when employing people, and 55 per cent called for greater tax benefits for smaller employers.

Alexander Jackman, head of policy for FPB, said: “Our members feel that further reforms must recognise the nature of small businesses and government cannot regulate for regulation’s sake. For instance, proposals on flexible working for employees will, in practice, impose structures that limit the flexibility of employers in managing their staff.”

More positively, he added: “The employment allowance coming in next year will satisfy those seeking greater tax benefits for small businesses, though some may use it to fund compliance training for new regulations.”

Adviser view

Chris Dunston, managing director of Devon-based Artavia Personal Financial Services, said: “These changes allowing for shared parental leave and more flexible working are totally impractical for most small businesses: if you have even 10 people working for you, the ramifications of having one off are huge. Additionally, the frequency of regulatory changes is very difficult to keep up with; I employ only four people but even with that number I have to employ a freelance employment adviser to keep me in line with legal changes.”