Welcome cut to red tape for Britain's small businesses

3.00.00pm GMT Wed 10th Mar 2010

Graham Watson Liberal Democrat MEP, has welcomed today's European Parliament vote in favour of exempting struggling small businesses 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; 2. The net turnover does not exceed € 1,000,000 and; 3. The average number of employees during the financial year is 10 or less.

Watson said:

"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 less.

"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".