Government announces its plans to reduce the burden of financial reporting for smallest companies.
A discussion paper – Simpler Reporting for Smaller Businesses – was published by the Department for Business, Skills and Innovation and the Financial Reporting Council today. It outlines plans to help smaller businesses overcome the burdens of preparing their financial accounts.
The smallest businesses, or ‘micro-entities’, are categorised as those which have a turnover of less than £440,000 per year. The Competitiveness Council’s data shows that around 60% of the businesses listed at the council and 3.5m unincorporated businesses in the UK are in this category.
The new, revised requirements would only oblige companies of the stated size to file a simplified trading statement (in place of the current Profit and Loss account), a simplified statement of position and a simplified annual return.
The Minister responsible for corporate governance Edward Davey said that if companies are relieved of such burdens, they are given the “freedom to innovate and grow”, that it “ultimately benefits the entire economy” and that it is “absolutely central to the Coalition’s vision for Britain.”
The Government has made it clear that the paper is just a discussion paper – designed to get the collective voice of business involved in debate over the issue.