The UK’s 1.5 million micro businesses will now be able to prepare and publish much-reduced financial statements, as the Government’s drive to reduce the red-tape burden on businesses continues. A micro business has:
• a balance sheet total of no more than £316,000
• a net turnover of no more than £632,000
• 10 (or fewer) employees.
Despite their smaller size, micro businesses have been subject to the same financial reporting rules as other small companies. However, they will now be able to draw up an abridged balance sheet and profit and loss account and will continue to be exempt from the requirement to file the profit and loss account with Companies House.
The changes follow a consultation period and will apply to:
• financial years ending on, or after, 30 September 2013; and
• related accounts filed on, or after, the date on which the changes come into force.
The Business Minister Jo Swinson said:
“Thriving micro-businesses are a vital ingredient for a stronger economy. However, because of their size they don’t always have dedicated finance teams behind them. We therefore need to make sure that they can focus on growing their business – rather than completing unnecessarily detailed paperwork.”