Euro-MPs free smallest firms from EU accounts red tape

The European Parliament has voted to exempt millions of 'micro' businesses from complex EU accounting rules. These smallest firms of 10 employees or fewer will only have to comply with national reporting requirements which usually demand only basic information.

London Liberal Democrat MEP Sarah Ludford said:

"It's very important to cut red tape when possible to boost jobs especially in these difficult economic times. So I'm delighted to back this exemption of the smallest firms which rarely operate across borders from complicated accounting rules."

"Small businesses will still have to supply information necessary to comply with national laws on transparency and taxation. But by removing them from the EU accounts regulation the regulatory burden is being slimmed down very significantly."

"It is now up to the UK government to implement this exemption and I will be pushing our LibDem ministers in the coalition to introduce the new rules as quickly as possible."

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

Note to editors:

A micro company is defined as one which does not exceed at least two of the following three criteria: total assets of up to €350000 (around £300000); net turnover of up to €700000 (around £590000) and maximum 10 employees.

According to a 2003 Eurostat breakdown 99.8% of all EU companies are SMEs providing two-thirds of all private sector jobs and 91.5% are micro businesses