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Comments from ACCA
September 2004

ACCA is pleased to comment on the above consultation document. ACCA welcomes the decision to consider the feasibility of introducing common commencement dates to areas of UK law. Over half ACCA's 100,000 members work in or service SMEs (small and medium-sized enterprises). We therefore have a special interest in issues affecting the business efficiency of this sector.

In the following paragraphs we address the individual questions raised in the Consultation Paper.

Would the introduction of common commencement dates help you? If yes, how?

ACCA believes, in principle, that the introduction of common commencement dates would be attractive to businesses. We therefore favour option three, put forward in the Consultation Paper, that common commencement dates be introduced, covering sectoral and generic regulations, rather than across the board.

We agree that employers would be better prepared if they knew that there was a fixed commencement date or dates when changes would take effect. If Government departments publish an annual statement of common commencement dates, accompanied by advice to help with compliance, employers would not then need to be constantly alert to when changes were to be introduced and would be able to plan ahead more effectively. Professional advisers too, would be able to plan their provision of advice and reminders to businesses in a more systematic manner.

Would you like to see common commencement dates extended to areas of the tax system? If yes, are there any specific areas where this would be most useful and why?

ACCA would not welcome common commencement dates for tax, on account of the fact that it could be restrictive.

What would be the optimum number of dates a year - 0, 1-2 or 3-5 for sector specific legislation and for generic legislation?

While it may be desirable to introduce one or two fixed commencement dates for new legislation, we suspect that, given the potential breadth and scale of new business legislation, it would be more practical to envisage a higher number spaced out evenly throughout the year. ACCA believes, therefore, that the optimum number of common commencement dates would be four.

Do you think that in the future common commencement dates should be introduced for European Regulations? What changes would common commencement dates in European regulations make to your business?

ACCA recognises that common commencement dates may prove difficult to adhere to in respect of European legislation, which has to be implemented by a certain date not of the UK Government's choosing. While we believe that common dates both for domestic and European regulations (which have included sufficient time for effective consultation and preparation for businesses) would be ideal and useful to businesses from a practical point of view, we would not expect all matters to be covered. However, all EU regulations should provide a substantial period of advance notice prior to introduction. A schedule of the implementation dates for all new EU legislation should be published each year by the UK Government. These schedules should be released with the autumn pre-budget report, for all EU legislation coming into force between April and September each year and with the spring budget statement for EU legislation commencing between October and March each year.

Does the implementation of regulations impose a greater burden for a small firm?

Evidence clearly demonstrates that small businesses are burdened disproportionately by regulations because they lack the time, resources and the staff to deal with them. Research indicates that the cost of compliance with regulations can affect small businesses differently, according to their size and sector and workforce composition.

How do you learn about changes to legislation? We would welcome your suggestions for how best to provide businesses and other organisations with coherent and comprehensive information on planned regulatory change.

Independent research demonstrates that accountants are the primary source of advice for small businesses. The 2004 Federation of Small Businesses Survey found that accountants are the most used source of advice and have the highest satisfaction rating for business support. ACCA will continue to take its own steps to inform its members of new regulatory requirements and to provide tools to facilitate compliance, both by advisers and their clients.

Do you have any other general comments to inform this consultation?

ACCA believes that at least as important as common commencement dates is giving businesses sufficient lead-in time to prepare for new rules, so as to enable them to make the necessary amendments and to train themselves and their staffs. Whichever dates are eventually decided upon, it is essential that Government departments ensure that the minimum 12 weeks' notice is given before new UK regulations come into effect. EU regulations that fall outside the common commencement date provisions should provide a minimum of six months' notice, as noted above. Exceptions should only be allowed in extreme circumstances, eg the banning of food substances found to be hazardous to health.

Government departments could be encouraged to reduce the amount of regulation because (as stated in the Consultation Paper, page 36) common commencement dates may demonstrate the significant amount of regulations with which businesses are expected to comply. It is, however, far more important to ensure that all regulations be driven by need, as opposed to ministerial or departmental initiatives. A thorough consideration of the possible alternatives must have taken place and the regulations must realistically meet the cost/benefit criteria, particularly considering the additional impact on small firms.

The recent report by the British Chambers of Commerce (BCC) found that the quantification of costs and benefits of regulations in Regulatory Impact Assessments (RIAs) is still weak, particularly in the assessment of additional costs to SMEs. The research revealed that only 7% of RIAs currently quantify extra costs, even though 60% of RIAs identify that there are additional costs for business. The report also found that there is almost no fluctuation in the number of RIAs produced per year. It is unlikely that this would be the case if regulation were introduced as a last resort and only in response to urgent need as a result of new and objective information or changes in circumstances.

Were you aware of the Department of Trade and Industry pilot on common commencement dates for employment regulations?

Yes.

Notes

Blackburn , R. and Hart, M. (2002). Small Firms' Awareness, Knowledge and Access to Information on Individual Employment Rights, Department of Trade and Industry.

Federation of Small Businesses (2004). Lifting the Barriers to Growth in UK Small Businesses (FSB Survey).

Ambler, T., Chittenden, F. and Obodovski, M. (2004). Are Regulators Raising their Game? : UK Regulatory Impact Assessments in 2002/3 .

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