European Commission needs to see broader picture on accounts filing requirements

European Commission needs to see broader picture on accounts filing requirements

In an effort to relieve micro businesses across Europe of administrative burden in these tough times, the EC plans to get rid of the need for businesses under 1 million Euro turnover p.a. to file accounts at registries like Companies House.According to Internal Market commissioner Charlie McCreevy, “this move could save micro businesses as much as 1200 euros a year”! Wow!!
I’m not the only commentator that thinks that this is another case of lawmakers having a complete lack of peripheral vision. They need to look at the bigger picture.Annual accounts are a valuable tool to banks, credit insurers, credit agencies in order to ascertain the financial solidity of a business. If these no longer exist, how will financial lenders, suppliers and insurers assess the risk of microbusinesses? Won’t credit dry up even more? In a very uncertain economic world, what the EC seems to be wanting to inject is more uncertainty. In order to get the banks lending to small businesses again, we need more information – not less.
If this becomes law across Europe, it is yet one more step on the road to getting rid of all statutory accounts at Companies house. If this carries on, we will find ourselves following the USA example, where only publicly quoted companies file statutory accounts at registries. That is why in the States, commercial credit reports rely heavily on trade payment data to produce credit scores. CRAs in Britain will have to follow suit and increase their collection of trade payment data from clients’ sales ledgers just to fill the gap caused by the absence of financials at Companies registry. Does anyone really want to wave goodbye to statutory accounts?

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource