The time gained which would be lost to paper work is expected to be worth as much as £8m for affected businesses. 

Danielle Stewart OBE head of financial reporting at Baker Tilly said: “The proposals in the consultation document are in line with the Government’s promise, made in the Red Tape Challenge, to reduce the overall burden of regulation.”

The accounting measures were announced yesterday, and will make it into UK law no later than July 20, 2015.

Currently, businesses must submit a profit and loss account, and notes from their financial statements. The detail in these documents depends on the size of the business, which depends on number of employees, net turnover and balance sheet total.

Businesses whose balance sheet totals no higher than €4m (£3.17m), and net turnover no higher than €8m (£6.35m), for the current and preceding year will now be deined as “small”.

Full implementation details of the EU Directive in the UK are to be discussed later this year.

Business Minister Jo Swinson said: “Any measures that cut red tape and allow more flexibility for financial reporting are a step in the right direction. All our companies should be concentrating on growing their business, not spending their time filling out paperwork for their financial accounts if they really don’t have to.”

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