Tuesday 14 February 2012
New employment legislation due to be introduced in April this year is unlikely to deliver desired levels of employment growth, according to an ICAEW survey. The findings also showed that Government intentions to reduce the regulatory burden are not yet being felt by UK plc.
The measures, to be introduced on 6 April 2012, that affect employment include:
- Extending the period under which new employees are protected under employment law
- Limiting the payment an employment tribunal can award in discrimination cases
Half (50%) of those surveyed by ICAEW did not think that the two measures would have any effect on their plans to take on new staff, generally citing the commercial requirements of the business, rather than legislation, as the key driver of whether or not to hire more staff. However, 26% cited either of the measures as encouraging.
When questioned about regulatory changes more broadly, over two-thirds (68%) did not know about the commitment to have a ‘one-in, one-out approach to business regulation and of those who did know about the initiative, 1 in 4 (25%) were not confident it would help the regulatory burden.
Michael Izza, ICAEW Chief Executive, said: “Despite best intentions the ‘one-in, one-out’ policy is not having a notable effect. Businesses are all too often spending time on administering the various regulatory measures and not concentrating on their business. This is having a serious impact and is damaging any opportunity for growth a company may have – crucial to economic recovery.”
Employment legislation, employment tax and health and safety regulation continue to be areas that cause the most headaches for businesses – with nearly half (49%) citing employment legislation as the main hindrance to the day to day running of their companies. Whilst less of a hindrance the changing of VAT levels as well as NI increases has also meant that many businesses continue to spend time changing their finance systems and invoicing procedures.
Michael Izza added: “For many years, VAT was at the same rate but has been altered a number of times over the last 24 months. Businesses need certainty and I want to see Government make a commitment not to alter VAT rates for the lifetime of this parliament.”
Commenting on the administrative burden of staying up to date and implementing business tax changes, one respondent said: “The complexity that we have to follow takes time and effort. This deflects from what you’re trying to do. It’s time consuming,” while another commented: “There is a drive to simplify it but I don’t see any evidence of that happening.”
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Contact Laura Hampson, ICAEW press office, on 01925 594 285 / 07715 496 478 or email laura.hampson@icaew.com