European business ministers have agreed to cut ‘micro-entities’ red tape, excusing the smallest firms from the burden of certain accounting obligations.
The ministers reached an agreement in Brussels this week that will see the simplification of rules for profit and loss account and balance sheet reporting.
It will allow EU member states the discretion to exempt the smallest companies from filing these accounts; however simplified balance sheet information will still need to be filed at Companies House. While not specifically stated in the government announcement, the simplification process would appear to make audits irrelevant for these companies too.
Business minister Ed Davey said it will benefit 1.5m small British companies and could save firms up to £300m a year.
Member states will now discuss the measures with MEPs, who must also give their approval before the new rules can enter into force.