The Minister responsible for corporate governance Edward Davey said today that if small businesses are relieved of the current burdens of financial reporting, 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 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 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 – however any moves to reduce red-tape – especially for small businesses is always welcome.