Government red tape is costing UK companies billions annually, it has been claimed.

Companies looking to outsource their back office requirements in a bid to free up valuable time could benefit from calls for political parties to take the issue of over-regulation of business seriously.

Business directors are spending more than a month each year handling government red tape, according to a new report from the Institute of Directors (IoD).

The organisation claims that the cost of government regulation to business is now running at more than £80 billion a year and dealing with the paperwork is diverting the focus of directors away from company building and job creation.

"When the regulatory burden is so large that it typically occupies one employee in every private enterprise in the UK for nearly half a year, it’s obvious we have a problem," said IoD director general Miles Templeman.

He added that "businesses will continue to face a large and ever increasing burden of paper work that hinders them from growing and, ultimately, creating jobs" unless the next administration changes the way things are done.

NatWest and Royal Bank of Scotland recently stated that late invoices and debt are "endemic problems" for UK companies.