The red tape blitz set to simplify regulation in the UK

This week, Chancellor Rachel Reeves announced a transformative package of reforms designed to stimulate the UK economy by cutting business admin by 25%, saving £6 billion.

Speaking at the first Regional Investment Summit in Birmingham, the Chancellor highlighted how targeted regulatory reform and strategic public investments will make sure there's balanced growth across every region of the UK.

The Chancellor said:

"We must know when to step in and when to get out of the way. By cutting red tape and reforming our regulatory framework, we're saving businesses an estimated £6 billion a year – time and money that can be reinvested in innovation, infrastructure and jobs."

The announcements that will affect small firms

• Higher monetary compliance thresholds which will eliminate the duplicated or redundant reporting requirements from the Directors' Report and Director's Remuneration Report and Policy, delivering £185 million in admin savings each year.

• Less red tape and fewer reporting requirements for all charities – generating around £47 million of admin savings per year – so they can spend more time and money supporting their causes.

• HMRC committing to improving the experience of the tax and customs system for UK businesses.

Tara Askham is an Enterprise Nation adviser and small business finance expert. She says:

"If they actually do manage to reduce the admin, then it could make a big difference to business cash flow. But I think it may depend on the industry the business is in.

"We know how important cash flow is. Around 82% of businesses fail because they don't manage their cash flow effectively.

"For businesses that have a lot of compliance and reporting demands, I think this will be very significant for them."

Nottingham-based Tara, who as founder of TKA Finance Training helps businesses better understand their finances, adds:

"Things like removing the need for directors' reports are still services you have to pay an external accountant for, which is then going to affect cash flow.

"Ultimately, anything the government can do to help micro entities and small businesses to improve their cash flow – cash flow that can be used for business growth – is a positive thing."

The government also plans to introduce a regulatory dashboard, which will allow businesses to offer honest feedback on how regulators in the UK are performing.

Also announced was a consultation, Unlocking Business: Reform Driven by You, that will allow businesses to submit evidence for future regulatory reforms.

A new AI Growth Lab

In a separate announcement at The Times Tech Summit, Liz Kendall, Secretary of State for Technology, announced plans for a new blueprint for AI regulation which could see AI rules and regulations relaxed under strict conditions.

An AI Growth Lab will pilot responsible AI that certain regulation can otherwise hold back, generating real-world evidence for the impact these tools can deliver.

The government was keen to stress that the Lab will be overseen by tech and regulatory experts and backed up by a strict licensing scheme with strong safeguards.

The Secretary said:

"To deliver national renewal, we need to overhaul the old approaches which have stifled enterprise and held back our innovators.

"We want to remove the needless red tape that slows progress so we can drive growth and modernise the public services people rely on every day.

"This isn't about cutting corners – it's about fast-tracking responsible innovations that will improve lives and deliver real benefits."

Known as "sandboxes", individual regulations are temporarily switched off or tweaked for a limited period of time in safe, controlled testing environments.

The government said the sandboxes would initially be set up for key sectors of the economy like healthcare, professional services, transport and the use of robotics in advanced manufacturing, to "accelerate the responsible development and deployment of AI products".

The Enterprise Nation view

Polly Dhaliwal, chief operating officer at Enterprise Nation, welcomes this fresh push to simplify regulation and cut the time small businesses spend on unnecessary admin.

"Founders tell us the burden of red tape often grows faster than their businesses do, so a 25% reduction target backed by practical reforms is good news.

"It's especially positive to see government acting on long-standing business asks, from simplifying corporate reporting to using digital tools to speed up planning, while also inviting firms to shape the next phase of reform through the new Business Questionnaire.

"To make this drive a real success for small businesses, reforms must be delivered consistently across regulators and reach the smallest firms, including sole traders and micro entrepreneurs.

"If this momentum continues into the Budget, it could mark a real shift towards a more practical, pro-growth environment where every small business spends less time on forms and more time building their future."

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