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Government considers reducing financial reporting burden for micro firms

The Department for Business and the Financial Reporting Council have published their ideas to reduce the amount of reporting micro-businesses would be required to undertake.

The measures would benefit around five million businesses, and result in considerable cost savings when preparing their accounts.

The paper, “Simpler Reporting for Smaller Businesses”, proposes easing corporate reporting procedures so that micro-businesses are only required 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.

“Reducing unnecessary regulatory burdens on the smallest businesses can give them the freedom to innovate and grow,” says Edward Davey, Minister for Corporate Governance.

“A new deregulation from EU rules targeted at micro-businesses means we now have a chance to deliver these benefits.”

The paper also proposes developing an integrated software package to help small businesses prepare financial information. This could also allow business owners to gain a better understanding of the trends in their businesses’ performance and help them plan for the future.

Written responses to the proposals should be provided by October 30, 2011.

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