By Daniel Hunter
Measures to reduce burdensome accounting red tape for micro-businesses have been confirmed today (Monday) by Business Minister Jo Swinson.
In the government response to the consultation on how best to implement the EU’s Micros Directive, published today, the UK’s 1.5 million micro-entities will now become exempt from certain financial reporting requirements.
They are currently subject to the same financial reporting rules as other small companies. However, responses to the consultation, which ran earlier this year, showed that this was an unfair burden for micro-entities relative to their size. As a result of the changes, micro-entities will be able to prepare and publish much reduced financial statements.
They will now be able to draw up an abridged balance sheet and profit and loss account. They will also continue to be exempt from the requirement to file the profit and loss account with Companies House.
“Thriving micro-businesses are a vital ingredient for a stronger economy. However, because of their size they don’t always have dedicated finance teams behind them. We therefore need to make sure that they can focus on growing their business - rather than completing unnecessarily detailed paperwork," Business Minister Jo Swinson said.
“The measures announced today are just one of the ways we’re cutting bureaucracy, letting micro-businesses get on with running their enterprises and creating jobs.”
The changes will come into force as soon as possible, and will apply to financial years ending on, or after, 30 September 2013 and related accounts filed on, or after, the date on which the changes come into force.
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