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Europe aims to cut accounting costs for small firms

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The European Commission has put forward plans exempting small companies from having to file audit reports with national authorities.

The exemption would apply to what are termed micro-entities defined as those companies with two of the following: a balance sheet of less than 500,000 euros, a net turnover below 1 million euros, and ten or fewer employees in a given financial year.

The proposals form part of an EU-wide effort to revive the European economy, and it is estimated they could save small qualifying firms up to 1,000 euros annually in administrative costs.

While the exemption needs the approval of EU ministers, it is unlikely any obstacles will be placed in its way.

David Frost, director general of the British Chambers of Commerce (BCC), welcomed the plans: “With 75 per cent of the regulatory burden on business originating in Brussels, this will be good news for hard-pressed small firms.

“It will be business that leads the UK out of recession. For this reason it is vital that companies are given the freedom to create jobs and wealth. The cumulative cost of regulation on business now stands at £66 billion, so the UK government should go further by announcing a moratorium on harmful extra legislation in what are exceptionally difficult times.”