Red tape is still suffocating us, say business groups

The task of making government legislation less onerous for entrepreneurs looks set to be an uphill struggle, if one business owner's experience with HM Revenue & Customs' website is any indicator.

Jonathan Friedman was amazed when he got to the end of the tax office's online advice on VAT repayments only to find a disclaimer that he should not rely on the information it was giving him.

The co-founder and finance director of Beige Plus, a luxury clothing retailer, had logged on to seek some clarity on the issue after being advised by his accountant that he may have incorrectly reclaimed VAT on one of his company's shops.

When he went to the relevant page, it explained that the law might be too complex for those without an accountancy qualification so a flow chart had been created to help users to understand their position.

But when Friedman came to the end of the flow chart, he found a line, thanking him for using the material but warning that he should not rely on its guidance.

"I couldn't believe what I read," he told the Financial Times. "It's almost funny, if it wasn't so serious."

Such instances are what David Cameron suggested could be eradicated when he unveiled the Red Tape Challenge website this week. This allows business owners to log on to access updates of different regulations. Users will then be able give their opinions on which laws should be changed or scrapped. Ministers will then use this feedback to assess which regulations to keep.

An HMRC spokesman said the case that frustrated Friedman might not be fixed by the new website because the wording had actually been agreed with the consent of business groups. He added that the online information was meant as guidance only and users could call the HMRC helpline for further assiatance.

The Red Tape Challenge has received a cool response from business groups.

The Federation of Small Businesses said most employers do not have time to keep checking a website.

The Institute of Directors noted that the Red Tape Challenge comes hot onthe heels of the Your Freedom website and the last government's Better Regulation Portal, neither of which, it said, had made any difference to businesses.

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