A year or so ago I blogged (somewhere) that compliance is the new fascism. I didn’t know how right I was.
For the last twenty odd years we’ve run a very (very) small business. It generates very little income but provides a useful facility to our clients. A couple of colleagues and I started it in 1991 as a facility for ourselves, but within a couple of years grew to a size requiring properly audited accounts which meant setting up a company and all that entailed. The administration, initially not onerous, has become so as ‘compliance’ grew to large and Kafkaesque proportions. We now have to pay a substantial annual fee to the FCA (Financial Conduct Authority..successor to the useless FSA) for the privilege of being allowed to trade whilst jumping through ever more complex hoops designed allegedly to deal with money laundering, bribery & corruption, treating customers fairly, complaints, training and business continuity. Stuff that any reputable organisation does as a matter of course, but which over the regulators have decided to acquire competence (?).
The regulations are impenetrable, ever growing and changing, have a look at this random link and believe me there’s an awful lot more where that come from. I suspect that the people who write them don’t understand them any better than those of us who are supposed to comply with them. Both sides are locked in a grotesque dance in which neither will admit that they don’t understand what the hell is going on. It’s gone too far and is now destroying businesses . People grumble about it but quietly because making a fuss will bring the regulators and inspectors down on your head and no one wants that.
We’ve been audited three times in five years not including an investigation by HMRC who apparently have to do so many in a year and prefer to pick on small businesses ( aka soft targets). Audits last between 2 and 3 days and are hugely disruptive, the HMRC investigation lasts for weeks. We also have to prepare a separate set of annual accounts for the FCA requiring an expensive visit from the accountant The auditors, none of whom have actually run a real company are not slow in telling you how to run ours. None of these inspections revealed anything of significance but they wasted a huge amount of our time.
Our little business is not a prime source of income and we kept it going as a sort of hobby (???!!!), and out of loyalty to our clients, however the last audit was a step too far. The auditor found no infringements but kept banging on about ‘treating customers fairly (our complaints log is blank), money laundering (what money ?) and how to set up our administration which works well with virtually no errors, and what business is it of his anyway.
So we’re voting with our feet and there will be just a little less revenue for the regulators. Let’s hope they realise that before the well runs dry, but I’m not holding my breath.