Euro MPs free small firms from EU accounting rules

The European Parliament voted this week to exempt so called 'micro-entity' businesses from complex EU accounting rules. Millions of small businesses must now only comply with national reporting rules which usually demand very basic information.

Local Lib Dem Euro MP Sharon Bowles, who voted in favour of freeing small businesses from drawing up heavy annual accounts, said:

"It is pure common sense to exempt small businesses that rarely operate across borders from complicated accounting rules.

"Of course it is important for small businesses to provide basic information to comply with national laws on transparency and tax regulation. But we must not make this process more complicated than necessary."

The vote comes after a two year struggle between the European Parliament and EU Member States in the Council over the definition of 'micro entity'. Euro MPs wanted to include as many small and medium sized businesses (SMEs) as possible under the relaxed accounting rules whereas Member States pushed for a tighter definition.

Following a compromise betweenMemberStates, Commission and Parliament, Euro-MPs managed to include a generous definition of 'micro entities' into the deal adopted this week. Micro businesses are now defined as firms with a total balance sheet of less than €350,000 (around £300,000), a net turnover of less than €700,000 (around £590,000) and no more than 10 employees on average per year.

Local Lib Dem Euro MP Sharon Bowles continued:

"This has taken a very long time to come to fruition - it's over four years since I began working on it!"

"It is now up to the Coalition Government to implement this exemption. I will be pushing our ministers to introduce the new rules as quickly as possible."

ENDS

Note to editors:

According to a 2003 Eurostat breakdown

• 99.8% of all EU companies are SMEs
• 91.5% are micro businesses
• SMEs provide 67.1% of all private sector jobs.

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