Red tape costs businesses in the UK £80bn a year, according to a report issued by the Institute of Directors (IoD).

The report suggests that directors at businesses are spending more than a month handling governmental red tape and the burden on workforces is equivalent to one member of staff working continuously on regulation for five-and-a-half months.

Companies are spending an equivalent to 5.7% of the UK's gross domestic product a year dealing with regulation.

"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 Miles Templeman, IoD director general.

"Unless the next government changes the way civil servants are evaluated and rewarded businesses will continue to face a large and ever-increasing burden of paperwork that hinders them from growing and, ultimately, creating jobs."

The IoD did not rely on government statistics when compiling their figures. The body quantifed the working hours company directors and their staff spend each day handing regulation and costed them using remuneration data.

A separate poll by law firm DLA Piper showed that 84% of businesses say that financial regulation needs to be reformed by the next government.