Europe cuts red tape for Britain's small businesses

By PRSD, on Wednesday, March 10, 2010

The European Parliament has voted in favour of cutting red tape for small businesses by exempting them from producing onerous annual accounts.

The objective of the proposal is to reduce the bureaucratic burden on micro-entities in order to enhance their competitiveness in the wake of the financial crisis.

Micro-entities are defined as businesses where two of the following three criteria apply:

1. The balance sheet does not exceed €500,000 (around £456,000);
2. The net turnover does not exceed €1,000,000 (around £912,000) and;
3. The average number of employees during the financial year is 10 or less.

South West MEP Graham Watson told the PRSD: “This is a ray of light for small businesses at a very difficult time.

“There are around two million businesses in the UK that have nine employees or fewer.

“We can therefore be very confident that this proposal would allow many small British businesses the breathing space they need in a tough economic environment.

“Under this measure small businesses must still keep records that show the company’s business transactions and their financial situation. That is important to ensure good practice. But they would no longer have to keep the same reporting rules as the big companies that have the time and money to produce annual accounts with ease.

“EU governments now have the opportunity to endorse this proposal and give a helping hand to small businesses. I hope our Government will do its best to support it and seize this opportunity to lighten the bureaucratic burden.”

(from a press release)

(Image: Red Tape, public domain under Creative Commons)