Euro MPs free small firms from EU accounting rules

Small businesses in the North East will be exempt from complex EU accounting rule following a vote in the European Parliament this week. Qualifying businesses must now only comply with national reporting rules which usually demand very basic information.

North East MEP Fiona Hall, 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 we must not make this process more complicated than necessary."

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 between Member States, 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.

Lib Dem Fiona Hall continued:

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