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Small firms could benefit from simpler reporting requirements

Up to five million small businesses could benefit from simplified reporting requirements if Government plans are given the go-ahead.

The Department for Business, Innovation and Skills (BIS) and the Financial Reporting Council (FRC) have published a discussion paper outlining proposals to ease the corporate reporting procedures for micro-entities.

Under the plans, the smallest businesses would only be required to file a simplified Trading Statement (in place of the current Profit and Loss account), a simplified Statement of Position and a simplified Annual Return.

The paper – ‘Simpler Reporting for Smaller Businesses’ – also includes proposals to develop an integrated software package to help firms prepare financial information and plan for the future.

Ed Davey, the minister responsible for corporate governance, said: ‘Reducing unnecessary regulatory burdens on the smallest businesses can give them the freedom to innovate and grow, which ultimately benefits the entire economy and is absolutely central to the Coalition's vision for Britain.

‘A new deregulation from EU rules targeted at micro-businesses means we now have a chance to deliver these benefits. The financial reporting regime must also serve the users of the information published by companies, whether they are customers, banks or government agencies. So we look forward to receiving responses to our proposals from a broad range of interested parties in the coming months’.

Those wishing to respond to the paper must do so by 30 October 2011.