Small firms waste £25bn on paperwork – now there's a plan to cut it

Why does running a tiny business have to be so complicated?

Small firms waste £25bn on paperwork – now there's a plan to cut it

Britain's small businesses are wasting an estimated £25 billion a year complying with the tax system, while owners spend precious hours navigating different departments, regulations, grants and government websites. Now Liberal Democrat deputy leader and Treasury spokesperson Daisy Cooper has identified what she calls Britain's “computer says no” economy and produced a 30-page plan to tackle it. You don't have to support the Liberal Democrats to recognise the problem: running a tiny business in Britain is often far more complicated than it needs to be.

“COMPUTER SAYS NO” ECONOMY HOLDING BACK SMALL BUSINESSES

Liberal Democrat deputy leader Daisy Cooper says the UK’s economic growth is being throttled by a “computer says no” system that blocks investment, slows innovation and pushes UK start‑ups overseas.

It’s the political party conference season and everyone is getting in on the act of advising the current Chancellor on how to unlock the UK economy.

Ms Cooper has a 30‑page growth plan and wants to tear down barriers to business, rebuild ties with Europe and create a digital one‑stop‑shop for entrepreneurs.

For small and micro businesses, this is about removing the friction that makes running a business harder every day, than it needs to be.

The Problem

Small businesses are having to cope with a system built for big ones. Daisy Cooper argues that Britain produces world‑class ideas but loses them because start‑ups struggle to scale, investors face complex rules and founders have to deal with fragmented tax, legal and regulatory systems. She also argues that Brexit made exporting harder and cost the UK billions.

For small and micro businesses, this shows up as slow approvals, confusing guidance, duplicated paperwork and inconsistent rules, leading to long waits for decisions and difficulty accessing export markets.

When you’re a team of one, or even a team of ten people, every hour spent navigating bureaucracy is an hour not spent serving customers or growing revenue and many small and micro business owners agree with the diagnosis regardless of their voting preferences.

Cooper’s Plan

A digital one‑stop‑shop for everything including tax, regulatory guidance, legal requirements, Companies House, investment support and general business services.

For small businesses, this could mean a single login and one place to update details, get answers, access grants and manage compliance. This is the kind of simplification small firms have been asking for, for years.

Faster decisions and fewer delays: a “computer says no” culture means slow everything from approvals and licensing to grants and responses.

A Department for Growth focused on removing barriers could mean quicker turnaround times, clearer rules, fewer contradictory instructions and more predictable processes.

For micro businesses in particular, having some time to spend on the business instead of in it, could be gold.

Easier exporting and cheaper importing: The Lib Dems are proposing a Growth and Defence Partnership with the EU. They want to deepen trade ties, rebuild access to the single market, create a customs union and reverse some Brexit‑related costs. Daisy Cooper claims Brexit is costing the UK £90bn a year in lost tax revenue.

For small businesses, closer EU ties could mean simpler paperwork, cheaper shipping and fewer border delays. That could mean easier access to 450 million customers and more confidence to export, which would be especially important for food producers and online retailers, tech start‑ups and micro‑manufacturers.

More investment reaching small firms

Daisy Cooper says too many British ideas scale overseas because investors find the UK system too complex. She wants simplified investment rules and streamlined approvals, to make the UK more attractive to investors and reduce friction for early‑stage companies.

For small businesses, this could mean easier access to funding and more local investment, supporting innovation with fewer hoops to jump through

A clearer skills and training system

Ms Cooper also argues that the UK’s technical education routes are confusing and fragmented. Small businesses feel this when apprenticeships are hard to navigate and training schemes are inconsistent. A simplified system could mean easier hiring and better‑prepared young workers with clearer routes into trades and technical roles and more support for micro‑employers

Less time on red tape

Small businesses spend disproportionate time on compliance because they don’t have HR teams, legal departments, finance specialists and regulatory experts. A streamlined system could free up, not just time but energy, money and headspace. That would be one of the best productivity boosts small firms could get.

Reducing Friction

The Lib Dem plan is political, and other parties have different approaches, but the themes matter regardless of politics. Anything that reduces friction for small and micro businesses and speeds up decision making and strengthens skills could move the needle for small and micro‑business productivity and growth and for the economy.

Politics

Small and micro businesses aren’t held back by lack of ambition, but by a system that makes simple things overly complicated and fast things painstakingly slow.

Whether Daisy Cooper’s plan ever sees the light of day is up to politicians and voters, but the problems she highlights are causing real pinch points for small and micro businesses and fixing them would unlock the potential of the UK’s crucial, economic engine.

One government front door could make running a business easier

Small businesses are estimated to spend £25 billion a year complying with Britain’s tax system and an average 44 hours each filling in compliance forms. Liberal Democrat deputy leader Daisy Cooper says this is part of a wider “computer says no” economy holding back growth, and she’s produced a 30-page plan designed to remove some of that friction.

It’s a political proposal, but the problem goes beyond party politics. A microbusiness doesn’t have HR, tax, legal and compliance departments, so every hour spent navigating government is an hour the owner isn’t spending on customers or growth.

ONE FRONT DOOR

One of the most interesting proposals is a government one-stop shop for business. The Liberal Democrats want to create a Department for Growth, incorporating the Department for Business and Trade, and give businesses a single account manager. For a microbusiness, the principle is attractive.