Lib Dem MEPs Vote on EU Move to Cut Red Tape for Small Business

December 14, 2011 5:25 PM

Lib Dems Vote on EU Move to Cut Red Tape for Small Business

The European Parliament voted this week to exempt so called 'micro-entity' businesses from complex EU accounting rules. Millions of small businesses must now only comply with national reporting rules which usually demand very basic information.

LIB DEM EURO MP for the region Sir Graham Watson, who voted in favour of freeing small businesses from drawing up heavy annual accounts, said:

"It is pure common sense to exempt small businesses that rarely operate across borders from complicated accounting rules.

"Of course it is important for small businesses to provide basic information to comply with national laws on transparency and tax regulation. But too often we hear how business is being quashed under mountains of red tape, well this is Brussels responding to those concerns. Where possible, we must free up regulations and rules to allow small businesses to get on with their trade which provides jobs and economic growth to the region."

The vote comes after a two year struggle between the European Parliament and EU Member States in the Council over the definition of 'micro entity'. Euro MPs wanted to include as many small and medium sized businesses (SMEs) as possible under the relaxed accounting rules whereas Member States pushed for a tighter definition.

Following a compromise betweenMemberStates, Commission and Parliament, Euro-MPs managed to include a generous definition of 'micro entities' into the deal adopted this week. Micro businesses are now defined as firms with a total balance sheet of less than €350,000 (around £300,000), a net turnover of less than €700,000 (around £590,000) and no more than 10 employees on average a year.

Watson continued:

"It is now up to the Coalition Government to implement this exemption. I will be pressing our ministers to introduce the new rules as quickly as possible."