Staggering number of SMEs say burden has worsened over last year.

 Government targets for cutting the amount of regulation facing SMEs do not go far enough, according to research from Pegasus Software, a provider of accounting and business software to UK SMEs.  

The research, which polled 450 SMEs, concluded that while almost half (40%) say that the targets are simply not enough, one in three (30%) believe that the commitment represents little more than “lip service.”

And as one in four admit to spending more than two months of the year focused on researching and complying with legislation, it’s little wonder that innovation is suffering.  The majority of those surveyed (92%) believe that excessive red tape hinders entrepreneurialism in the UK.

The majority of those surveyed (84%) believe that technology can help in mitigating against increasing legislation while 10% believe it is a panacea to the problem.

The regulatory burden has worsened in the last year according to 93%, with a further 92% predicting an even gloomier outlook for the next 12 months.  When asked about the biggest pressure facing them in 2008, almost half stated the economic slowdown, with one in three struggling to perform too many job roles.       

Kevin McCallum, commercial director at Pegasus commented on the report saying, “it is encouraging that the government is taking steps towards reducing the regulatory burden on SMEs, but these findings highlight that there is still a long way to go.  As many SMEs spend several months each year on compliance, at the expense of innovation, there is cynicism that the targets represent little more than lip service.”

“In the absence of an immediate solution, or indeed a crystal ball, it is reassuring that the majority of SMEs recognise that technology has a significant role to play in alleviating the regulatory burden.  And with economic slowdown the top pressure point in 2008, it is integral that SMEs utilise the tools available to them to enable them to focus on running their business profitably,” concluded McCallum.

The research surveyed 450 UK SMEs and was undertaken in May 2008.

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