Small companies boosted by proposed EU legislation

Small businesses in the UK and across Europe could be freed from paperwork and red tape under proposed legislation.

Under a European Union plan, companies with fewer than ten employees, a balance sheet of under €500,000 (£454,400) and a turnover of less than €1 million (£908,805) will no longer have to comply with certain requirements in the Company Law Directives that force them to draw up annual accounts.

It has been estimated by Arlene McCarthy MEP, vice president of the economic and monetary affairs committee, that this could save small businesses around £1,000 in accountancy and audit fees a year.

European Small Business Alliance president Tina Sommer said the existing directives were having a much heavier effect on smaller businesses than larger ones, and has welcomed the new exemption.

She said: "It increases the credibility of EU claims towards reducing administrative burdens and will positively affect the trust of the small business community in the EU’s efforts to support our smallest and most vulnerable businesses."

Member states will have to approve the proposal before it comes into effect, meaning it may not necessarily have an impact on British businesses.

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