The burden of UK regulation has reached a tipping point, with the ACCA warning that "cumulative red tape" now poses a greater threat to SMEs than any single legislative change. We explore why a "one-minus-two" approach is the profession’s new mandate for growth.
For years, the UK has prided itself on being a “trusted place to do business.” But for the practitioners on the front lines—the partners at mid-tier firms and the CFOs of ambitious SMEs—that trust is increasingly being tested by a regulatory environment that feels less like a safety net and more like an anchor.
In a recent submission to the government’s Unlocking Business: Reform Driven by You consultation, the ACCA has issued a stark warning: it isn’t necessarily one single piece of legislation that is stifling British enterprise; it is the cumulative burden of overlapping, outdated, and inefficient rules.
The central argument from the ACCA is that regulators often work in silos, oblivious to the total volume of compliance work they are dumping onto a single business owner’s desk. This “regulatory creep” is particularly damaging to the UK’s 5.5 million small businesses, which lack the massive compliance departments of the FTSE 100.
“As trusted advisors to business, [our members] see first-hand how the cumulative burden of regulation erodes confidence,” says Joe Fitzsimons, Regional Lead Policy and Insights at ACCA UK. This isn’t just about administrative annoyance; it’s about capital. Money spent on navigating a convoluted tax system or duplicating data for different regulators is money not spent on R&D, hiring, or expansion.
To combat this, the ACCA is proposing a radical thinning of the herd: a “one-minus-two” approach. For every new business law adopted, two unnecessary or redundant ones must be scrapped.
This isn’t just about cutting for the sake of cutting. It’s about creating a “slimmed-down” environment that prioritizes effectiveness over volume. Key areas highlighted for immediate modernization include:
The Audit Gap: The long-overdue establishment of the Audit, Reporting and Governance Authority (ARGA). The delay in replacing the FRC has left a vacuum in corporate governance that needs filling to restore investor confidence.
The Tax Maze: The UK tax code is now over 20,000 pages long—one of the longest in the world. Simplification is no longer a “nice to have”; it’s a prerequisite for growth.
Data Friction: The ACCA is calling for better data sharing between regulators. Currently, businesses are often forced to submit the same data sets to multiple agencies in slightly different formats—a blatant inefficiency in a digital age.
Consider a typical UK micro-business. In a single year, they may need to navigate VAT threshold changes, updated IR35 requirements, new ESG reporting expectations from lenders, and the 2018 Data Protection Act.
When you add the looming complexity of AI regulation—where the UK is currently striving to be “world-leading”—the risk of a “compliance paralysis” becomes very real. If the new AI framework doesn’t integrate holistically with existing data laws, we risk creating a fragmented system that scares off tech innovators.
Glenn Collins, Head of Technical and Strategic Engagement at ACCA UK, puts it clearly: “Regulation can build confidence through transparency and trust. However, when regulation is outdated or ineffective, the resulting costs… must be addressed.”
For the Treasury and the Department for Business and Trade, the message is clear: the profession isn’t asking for a “wild west” bonfire of all rules. They are asking for a surgical, holistic strategy that treats regulation as a single ecosystem rather than a series of disconnected hurdles.
The UK’s reputation depends on it.
