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Peninsula Team, Peninsula Team
(Last updated )
Peninsula Team, Peninsula Team
(Last updated )
The Prime Minister has told SMEs he plans to simplify some reporting rules to reduce red tape by doubling the employee size threshold from the current 250
Speaking at the third Small Business Conference, Rishi Sunak told delegates that ‘the deregulatory measures would simplify both non-financial and financial reporting for SMEs which is expected to save thousands of businesses across the UK around £150m per year’.
One of the major announcements was a plan to increase the number of companies which qualify as a smaller or medium sized business through a 50% uplift to the thresholds that determine a company’s size.
This would see the employee size threshold rise from 250 to 500 employees, which would mean around 1,000 more large companies could become SMEs.
The current definition of a medium business is 50 to 249 employees and a turnover of less than or equal to €50m (£42.7m) or a balance sheet total less than or equal to €43m (£36.7m)
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The government said this is expected to benefit up to 132,000 businesses who will be spared from burdensome form-filling and non-financial reporting requirements.
‘The existing onerous and outdated thresholds were previously set by the EU, but our Brexit freedoms mean we can now raise the thresholds to ensure they’re more proportionate and better reflect the needs of British businesses,’ the Prime Minster said. ‘This has also allowed us to go further than the EU, who recently raised its thresholds by 25%.’
They are also looking to exempt medium-sized companies from producing strategic reports, which could save them a further £148m a year.
As part of post Brexit reforms, the government will also remove several duplicative and bureaucratic EU reporting requirements, including some changes to what companies must set out in their annual reports, while also making it easier for companies to share digitalised annual reports rather than paper copies.
Secretary of state for business and trade Kemi Badenoch said: ‘Almost every job in the UK is owed to what is, or what previously was, an SME. They are the engines of economic growth for this country.
‘Whether it’s through cutting red tape, unlocking investment or lowering business costs, this government is committed to doing all it can to turbo-charge SMEs so that they can go further and faster than ever before.’
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