There was good news for micro-businesses last week as the EU decided it was time to unburden them from the heavy weight of small business accounting. Business Minister and aged Wayne Rooney lookalike Ed Davey announced that by reducing the accounting responsibilities of businesses with fewer than ten employees and turnover less than £434,000 – businesses which they have termed “Micro-entities” – it’s estimated these changes will save the qualifying small enterprises in the UK around £300 million per year.
Davey said of the decision -
“This is a significant step in reducing red tape and a clear signal that we will take action to stop our smallest companies being held back by excessive regulation.
“I believe this shows what can be achieved by a positive and constructive engagement with the European Union – the first ever exemption for micro-entities from an existing EU directive. We now need to build on this breakthrough and I hope that further improvements can be agreed before the proposal becomes law.”
The main accounting nuisance micro-entities will liberated from is the filing of annual accounts with Companies House – although a stripped-down balance sheet will still need to be submitted. Full accounts will also still need to be submitted to HMRC electronically, so although the new measure is a step in the right direction it won’t save a massive amount of time.
Meanwhile, additional guidance has been issued for the upcoming Agency Workers Regulations in October that will likely cause yet more trouble for Umbrella Companies hoping to employ the Swedish Derogation Model. Lewina Farrell of the REC has thrown a spanner into the works -
“All agency workers, including those covered by [the Swedish Derogation], are entitled to other new provisions under the regulations, in particular equal treatment in relation to the duration of working time, night work, rest periods and rest breaks, and annual leave after 12 weeks. This underlines the fact that the Swedish Derogation is not a ‘miracle solution’.”
So while all freelancers and small businesses will likely be applauding the EU’s actions in reducing the red tape around managing your finances, those using Umbrella Companies will likely be cursing the unforgiving sky after yet more uncertainty as to what the end result of AWR’s introduction will actually be.
