The Office for National Statistics (ONS) has recently announced plans to phase out half of its monthly surveys for small businesses by 2020: a move that could spell serious savings for UK companies.
Old vs new
The ONS currently sends out 45,000 surveys every month, gathering information from companies representing around 55% of the total economy in order to produce its economic growth estimates.
Under the new plans, the ONS would instead use data from VAT submissions to HMRC to supplement the costly surveys, and in the case of small businesses, replace them entirely. Of the remaining medium and large businesses that will still be sampled to produce the data, many will be invited to participate in the ONS electronic data collection programme: enabling them to quickly complete and submit surveys online.
What this means for businesses
According to the ONS feasibility study, this could result in savings of 40% (around £720,000 per year) for the taxpayer and 50% for participating businesses; primarily thanks to time savings, postage costs and additional accounting costs associated with gathering relevant data for the surveys.
Eliminating these distractions would deliver a welcome boon for small businesses who, at the start of this year, rated regulatory costs as one of their biggest concerns when planning growth strategy.
Because the HMRC data covers more businesses and contains more detailed data, the changes could potentially mean significant improvements in UK economic reporting. In particular, it’s suggested that the increased accuracy will give a better picture of the UK economy in the long-term, and the production of more detailed regional breakdowns will help policymakers identify which areas are performing better or worse, and respond accordingly.
By retaining the surveys for a sample of larger companies, the ONS argues, economic observers and businesses will get the best of both worlds; receiving a timely overview of the headline data from the remaining survey and, slightly later, a fuller, more accurate picture of how the economy is progressing thanks to added HMRC data.
From our perspective, reducing reporting obligations and associated costs is a welcome measure for small businesses, and if it also empowers policymakers to better understand regional performance, the long-term impact could be very positive for British business.
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