The amount of regulation faced by small and medium-sized enterprises (SMEs) is stifling business and should be reduced, according to the Institute of Chartered Accountants in England and Wales (ICAEW).

The amount of regulation faced by small and medium-sized enterprises (SMEs) is stifling business and should be reduced, according to the Institute of Chartered Accountants in England and Wales (ICAEW).

The ICAEW claims that the total cost to SMEs of implementing new regulations is £10.2 billion each year in the UK alone. The institute says Red tape acts as a burden on SMEs, which are subject to many of the problematic rules that affect larger companies.

Head of medium sector issues at the ICAEW, Clive Lewis, said the European Union especially needed a fresh approach to SME issues, ideally one that is “framed by a coherent set of principles.”

He added: “The ten tenets of SME policy devised by the ICAEW ask for any future legislation to be based on evidence; focused on incomes; simply communicated and easily applicable.”

The instutute has asked for a review of the administrative burdens on SMEs, particularly the collective impact of employment law (singled out as the biggest administrative burden by respondents), health and safety legislation and VAT.