The government-funded Anderson Report, produced by Sarah Anderson, an entrepreneur and former small business counsellor, surveyed companies and found they have little confidence in the advice on health and safety and employment laws.

She says many of these firms do not know where this guidance is and so three-quarters choose to pay for information, which costs at least £1.4 billion per year.

‘Improving the quality of, and access to, government advice is vital if we want to see better understanding of, and compliance with, the law,’ Anderson adds.

The expert says the majority of small firms feel the government should do more to enable them to comply with the law.

Proposals in the report include a telephone advice service and creating a single access point for all government advice.

Commenting on the findings, David Frost, director general of the British Chambers of Commerce, says it is crucial for the UK’s competitiveness for the government to issue this clear advice.