Minister Plans to Slash Small Company Accounts Red-tape

Minister Plans to Slash Small Company Accounts Red-tape

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Minister Plans to Slash Small Company Accounts Red-tape

"Recording keeping costs to be reduced"

Property investors running small companies could benefit from government plans to cut red-tape.

Many property people run their buy to let or buy to sell businesses through limited companies – and some have other business interests with a corporate structure as well.

The government plans to slash record keeping costs for around five million firms by bringing in new financial reporting procedures.

Corporate accounts and company returns are due for scrapping – with simplified trading statements taking their place.

The move was heralded with the launch of a discussion paper published by the Department for Business, Innovation and Skills (BIS) and the Financial Reporting Council (FRC).

Minister for Corporate Governance, Edward Davey 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.”

The paper also urges the development of specialist software to produce the simplified financial reports that will also help managers and owners spotlight aspects of financial performance.

Annual accounts and returns for small companies are costly and time-consuming for many businesses as they involve layers of regulation designed to protect shareholders in larger entities.

Small family companies tend to be owned and run by one or two directors to protect assets or as tax-planning vehicles.

Typical costs of drafting accounts varies, but most companies pay £800 – £1,200 a year to complete the work.

“The paper is not intended as a statement of Government policy. It has been developed to stimulate discussion and gather evidence before the Government decides whether to take forward any further action in this area,” said the minister.

Written responses to the proposals should be provided by 30 October 2011.



Comments

Jason Holden

7 years ago

I wouldn’t get excited just yet. After 24 years in practice I have yet to see a real terms reduction in red tape and obligations on small business.


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