The Department for Business, Innovation and Skills and the Financial Reporting Council have today published a discussion paper containing proposals to simplify the financial and corporate reporting requirements for the smallest businesses. More particularly, the paper proposes that micro-entities (namely, businesses with less than £440,000 turnover, net assets of less than £220,000 and fewer than 10 employees) only be required to file a simplified trading statement (in place of the current profit and loss account), a simplified statement of position and simplified annual return. In its press release, the Government states that this covers approximately 60% of companies registered at Companies House and 3.5 million unincorporated businesses and indicates that the proposals could result in considerable costs savings for around 5 million businesses.
The paper also proposes developing an integrated software package to help small businesses prepare financial information, with the intention of enabling managers to gain a better understanding of the trends in their businesses’ performance, so helping them to plan for the future.
The paper is not intended as a statement of Government policy but has been developed to stimulate discussion and gather evidence before the Government decides whether to take any of these proposals forward. Written responses to the proposals should be submitted by 30 October 2011.
The discussion paper can be viewed at: http://www.bis.gov.uk/assets/biscore/business-law/docs/s/11-1100-simpler-reporting-for-smallest-businesses-discussion-paper