The Burden of Government

Government's actions and demands, as detailed below, have a big effect on the company and its business. These burdens placed on the company would probably take up staff time and effort equivalent to about 5 per cent of the workforce. Also, because all businesses have to bear similar regulatory burdens, the goods and services which the company buys are made more expensive: part of the increase in cost is really due to the government.

It is possible that the burden we can see or measure directly is just the tip of the iceberg. Across the whole economy, the measurable cost of complying with regulations which fall on organisations and individuals can be estimated at 10 per cent of UK gross domestic product. But the hidden costs are impossible to calculate, in terms of the time and effort which could have been put to constructive creative use, which are instead diverted into pointless activities which contribute little or nothing to the economy or to society.

Type of burden	Details
Calculating tax and remitting it to govt.	On average, UK companies pay about half of gross profits as tax, but this does not include the costs involved in calculating, collecting and organising the payment of taxes: income tax and National Insurance contributions deducted from employees' wages, VAT on sales and purchases, corporation tax, tax deducted at source from interest payments to lenders, capital gains tax, income tax withheld on dividends to shareholders, insurance premium tax, vehicle tax...
User fees	Businesses pay taxes and other user fees for waste disposal: landfill tax, extra charges for disposing of hazardous waste. Also related to waste disposal is the aggregates levy. For energy usage, businesses pay climate change levy, and hydrocarbon taxes. These "levies" and "fees" are taxes by another name.
Applying for permissions	Businesses have to apply for permissions and licences, such as petroleum licences and fire licences. Any significant changes to buildings and premises require planning permission and building control inspections.
Compliance with regulations	The British Parliament currently passes well over 5,000 sets of regulation every year. That's one set of regulations every ninety minutes! Many of these regulations, particularly dealing with employment, health and safety, and the environment, impose further costs on businesses.
Other tasks demanded by government	In the course of achieving certain social goals, the government demands that businesses perform certain tasks for them. If, for example, a job is held by a man who has been negligent in providing for his children, the employer may be forced to become involved in attaching his earnings, deducting money from his pay cheque and sending it to his ex-wife. The government does not think twice about requiring businesses to carry out such tasks even though they impose additional costs on businesses.