Accounting rule simplified for small companies

The government has given the go-ahead for measures exempting micro-businesses from the demand to file a profit and loss account with Companies House, Business Minister Jo Swinson has confirmed. The consultation on the best means of implementing the EU's Micros Directive has drawn a government response in which the UK's 1.5 million micro-entities will no longer be subject to the same financial reporting requirements as other small companies, in an attempt to relieve "burdensome accounting red tape". The development will intrigue many of those engaging a tax accountant in Surrey from Sherwin Currid (http://www.sherwincurrid.com).

The voluntary exemption will apply to the financial years ending on or after September 30th 2013, and will enable the submission of an abridged balance sheet and profit and loss account by the smallest firms in the UK. They will also retain their exemption from the requirement to file the profit and loss account with Companies House. The change comes after responses to the consultation that ran earlier this year suggested that the size of such firms made the existing requirements a particularly unfair burden.

Eligibility for the exemption depends on the micro-entity meeting two of the three following criteria: a balance sheet total of no more than £316,000, a net turnover of a maximum of £632,000 and 10 or fewer, on average, employees during the financial year. The Micros Directive is the first deregulatory EU Directive in which recognition is given to micro-entities, with the UK successfully negotiating exemptions for these firms - which include many clients of accountants in Surrey from Sherwin Currid.

The Business Minister said that with micro-businesses being "a vital ingredient for a stronger economy", but often lacking "dedicated finance teams" of their own, the government had made the changes so that they could better "focus on growing their business - rather than completing unnecessarily detailed paperwork." She described the new measures as "just one of the ways we’re cutting bureaucracy, letting micro-businesses get on with running their enterprises and creating jobs."

However, for all of the government's talk of cutting red tape for smaller companies, it appears that few of those firms calling upon services like our own tax accountants in Surrey have been convinced by its measures so far - with nine in ten businesses believing that there had been no improvement in the UK's regulatory environment in the last 12 months. The Institute of Chartered Accountants in England & Wales revealed 70 per cent of businesses to be unfamiliar with the state's 'one in, two out' policy, under which for every two rules that are removed, only one should be introduced.

Even among the firms that were aware of the policy, only 13 per cent believed that it would help to reduce their own regulatory burden - suggesting that other means by which micro-businesses can spend more time on their core business, should as enlisting the help of an accountant in Surrey from a firm like Sherwin Currid (http://www.sherwincurrid.com), should remain vital for some time to come.

Editor’s Note: Sherwin Currid (http://www.sherwincurrid.com) are represented by the search engine advertising and digital marketing specialists Jumping Spider Media. Email: info@jumpingspidermedia.co.uk or call: +44 (0)20 3070 1959 / +34 952 783 637.