The government is piling additional pressure on small businesses by sneaking in back-door legislation, according to the Federation of Small Businesses (FSB).

The FSB has claimed the government is ignoring its own rules by introducing legislation outside of the two common commencement days ­ 6 April and 1 October.

Despite Alistair Darling’s recent pledge to cut red tape 82 new pieces of legislation were introduced on 6 April ­ an increase of 12 per cent compared with last year.

In addition, three new pieces were brought in outside of the common commencement days this year.

In a statement, John Wright, national chairman of the FSB, said: “By ignoring its own common commencement dates the government is effectively sneaking regulation in through the back door and hoping no one will notice.”

Mike Lawrence, managing director of reseller BentPenny, said: “The government is frightening off people when it comes to employing new staff. To keep up with the legislation, the work is being sub-contracted.”

The FSB’s Annual Survey of Small Businesses’ Opinions for 2006/2007 ranked regulations as the second biggest obstacle in relation to a company’s success.

The average time spent on paperwork relating to government regulation and taxes was five hours a week.

The FSB survey also found that the regulation was inhibiting 90,000 small businesses from growing.

“More SMEs are using sub-contracting, which is bad for employees and will not encourage businesses to grow,” Lawrence added.

Kevin McCallum, commercial director at financial software vendor Pegasus, said that Pegasus’s online filing and document management tool received 1.5 million payroll
submissions, checked under HM Revenue and Customs’ standards, last year.

“More SMEs are opting for electronic systems that were not available before. There has been an increase in legislation over the past few months, but proof of compliance is just as important as compliance,” he added.