The European Parliament’s legal affairs committee has proposed an opt-out allowing EU (European Union) small businesses turning over less than an annual £865,000 (corresponding to €1million), to stop filing annual accounts. The opt-out would apply to small businesses with a balance sheet under €500,000 and/or an average of 10 employees during a particular year, criteria which the committee estimates to apply to 75% of European businesses – 5.4 million of the EU’s 7.2 million companies.

However, it must be noted that even if the proposal goes through, businesses will still be obliged to keep records of their transactions, and EU individual governments could still choose to ignore the opt-out and have their businesses file their annual accounts.

The opt-out was introduced as a way of reducing the accountancy burden for small [in particular micro] businesses. Moreover, one explanation given is that as those businesses to which these criteria apply generally tend, by their nature, to be confined in regional and local markets, they do not really affect the EU single market and so there is no direct reason for strict surveillance.

The German Christian Democrat MEP Klaus-Heiner Lehne proposing the change explained: “ To that extent they [micro-businesses] have no cross-border impact on the single European market, and…[so] they need not be bound by EU-wide internal market regulations.”

This EU proposal is yet another indication of change and freedom in small business working practices. It comes at a crucial time where small businesses have now learnt the importance of efficiency through the recession, and are now also increasingly adopting virtual working practices in their attempt to be leaner, more efficient, and with less bureaucracy.

Posted Comments:

No comments posted