million hours dealing with red tape every year.

A NatWest report found

regulatory burdens on smaller companies were increasing.

Sole traders suffered most with one-man-band managers spending nearly eight hours a month on red tape.

The average firm with more than 50 staff spends 43 hours every month on official paperwork - 600 million hours across the UK each year.

NatWest calculated the additional workload cost the economy an annual £17 billion - two per cent of Britain's gross domestic product.

Nearly two-thirds of the 500 businesses polled believed they had seen an increase in regulatory work, with manufacturing and domestic services companies being hit hardest.

Peter Ibbetson, head of small business services at NatWest said: "Compliance is a necessary part of running a business, but in many cases it has become burdensome and over-complicated."

The Government has pledged to cut red tape as part of its

positioning as a business-friendly administration. But around 70 per cent of survey respondents said they felt the burden had increased, with 14 per cent citing regulations and paperwork as the single biggest problem facing their business.

Worst red tape culprits were named as VAT, PAYE and National Insurance contributions, followed by tax self-assessment.

Only three per cent found the minimum wage a problem and just five per cent cited the 48-hour week working time directive as a major gripe.

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.