EU moves to ease small business accounting burden

An opt-out allowing European Union (EU) small businesses turning over less
than €1m (£865,000) per year to stop filing annual accounts has been proposed by
the European Parliament’s legal affairs committee.

It has passed amendments to a proposed reshaped ‘directive on the annual
accounts of certain types of companies as regards micro-entities’ which would
allow member states to abandon these filing duties.

The opt-out would apply to companies with a balance sheet under €500,000
and/or an average of 10 employees during a particular financial year, which the
committee thinks makes up 5.4 million of the EU’s 7.2 million companies.

They would still have to keep records of their transactions however, and
national EU governments could still ignore the opt-out and order them to file.

The German Christian Democrat MEP proposing the change Klaus-Heiner Lehne
said: “The reach of micro-entities’ business is generally confined to the
regional and local market. To that extent they have no cross-border impact on
the single European market, and…[so] they need not be bound by EU-wide internal
market regulations.”

The committee’s amendments will need support from the full parliament to go
forward; the proposals are part of a European Commission-sponsored review of EU
company rules, designed to cut red tape.

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