A new discussion paper, published last week by the Department of BIS, contains proposals which could ease the financial reporting burden for limited company contractors.
The paper, ‘Simpler Reporting for Smaller Businesses’, is aimed at stimulating debate over the current corporate and financial obligations faced by the nation’s small businesses. The proposals include easing the reporting requirements of limited companies, so they may soon only be required to file a Trading Statement instead of the current P&L account, together with a simplified Statement of Position. The vast majority of contractor limited companies would be covered by any changes; a micro-entity as defined as one which turns over under £440,000 per year, has less than £220,000 of net assets, and employs less than 10 people.
If these proposals do become law in the future, there is no doubt that the accountancy costs of many small businesses will be cut. We think they will, so bring on this reduction in red tape!