Government action to save small firms 40m Pounds
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March 2011 - BIS
Government action to save small firms 40m
No small firm will have to
have independently audited accounts any longer, Business Secretary
Vince Cable announced today, saving 42,000 businesses £40 million per
One of the barriers to
growth is the burden of regulation. It takes up time and stops business
growing and that means our economy does not grow.
The Business Secretary
outlined changes to regulation in one area which is a massive burden to
business – producing accounts. Small businesses in particular often
suffer the most under the burden of bureaucracy.
Business Secretary Vince
“It’s important that we free
small firms up so they can grow and drive the economy. The changes I
have announced today mean that small firms will be able to concentrate
on growing and taking on more people instead of paperwork.”
The Government recognises
the need for high standards in audit and accounting. But some areas
could do with reform so we are taking action in three areas:
- Firstly the small company audit and account rules are
stricter in the UK than is required by EU law;
- Secondly for even smaller businesses (with less than 10
employees) Government will push for exemptions to remove the
requirement to produce two sets of accounts;
- Thirdly for medium sized businesses Government will push
for EU restrictions to be lifted so that they no longer need their
account independently audited and;
- Finally, Government will look at relaxing the audit and
accounts rules for subsidiaries.
In a speech last night the
Business Secretary spoke about the importance of growth. He also spoke
about the importance of the Government’s growth review which will make
sure that every part of Government is doing all it can to support
growth, getting out of the way when it needs to and only intervening
where there is market failure.
1 The full text of the Business Secretary’s Trade and Industry
Dinner speech can be found at www.bis.gov.uk
2 The Government will amend the Companies Act to bring small
company audit rules in line with the EU minimum in 2012, saving UK
companies up to £40m in unnecessary audit fees. This means certain
small companies who still have to have independently audited accounts
will no longer have to do so, helping 42,000 businesses.
3 For even smaller businesses, Government will push for
exemptions in European rules to remove the requirement to produce
specific accounts for Companies House in addition to those for tax
The changes would mean small companies would produce just one
simplified set of accounts and save £400m for some of the smallest
businesses in the country – roughly 2 million of them will be able to
concentrate on growing, expanding and creating jobs.
4. Currently medium sized businesses have to get their
accounts independently audited. The Government will push the EU to
release them from this requirement. This change could free over 32,000
businesses from red tape.
5. Government will also look at relaxing the audit and account
rules for subsidiaries. The change will mean that dormant subsidiaries
with parent company guarantees could be exempted from the requirement
to prepare and publish annual accounts. This would benefit up to 23,000
dormant companies, including those set up to hold assets or
intellectual property, or in preparation for transactions at a future
Wholly owned non-financial subsidiaries with parent company
guarantees could be exempted from audit. This would benefit around
139,000 companies set up within groups, including for transactions,
property, brand or asset management, as part of organisational
structures and restructuring or for internal financial arrangements.
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Article Published/Sorted/Amended on Scopulus 2011-03-06 18:14:45 in Business Articles