Regulation reform offers £9 billion opportunity for small firms

19 Mar 2026

Small businesses spend billions of pounds and millions of hours on red tape - but regulators and the government rarely design rules with them in mind, according to research by the Federation of Small Businesses (FSB).

The research indicates that the annual cost of compliance for the small and medium-sized business community is £36 billion, while the time spent grappling with compliance issues uses up 379 million hours.

The FSB says this represents countless lost opportunities for growth, as well as a week-in week-out regulatory toll that makes just continuing to trade more difficult than it needs to be.

The report found evidence that regulators and the government could be doing more to help small businesses.

Tina McKenzie, Policy Chair at the FSB, said: 'Past governments have made all the right noises about simplifying and easing regulation, but their efforts have fallen short of what's needed.

'A joined-up approach from the government would be highly helpful, if perhaps easier said than done. Regulators themselves also have a huge part to play, and their commitment to helping small firms with compliance needs to be more than lip service.

'If the government and regulators get it right, millions of hours and billions of pounds will be returned to the small business community to invest in growth and innovation and helping to get our economy out of the doldrums.'