The Office of Fair Trading (OFT) is to increase its fees for investigating mergers of small companies by a third, but the government insist the overall burden on business will not be greater.

From 1 October, the OFT will charge £40,000 to inspect an acquisition - where the acquired party has a UK turnover of less than £20m - for any potential anti-competitive elements, up from the £30,000 it is at present.

As the rules stand, an acquisition can be voluntarily referred to the watchdog if a party involved suspects possible anti-competition issues but with fees rising, the question is whether less voluntary referrals will be made in the future.

The Department for Business Innovation and Skills (BIS) - responsible for the hike in OFT fees - rejected such accusations. 'The government is confident that an increase in the fees will not have a negative impact on voluntary referrals. If an acquiring firm believes there may be competition issued raised by a proposed merger, a voluntary referral will only help save time and money in the long run.

'If the OFT decides there are no competition issues to address then a merger can go ahead with the certainty of no future investigation. There is clearly a strong incentive for voluntary referrals in both cases,' a BIS spokesperson said.

The fees are also set to rise for merge agreements of larger companies, with increases of at least £20,000 in each of the three higher bands.