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March 01, 2013

Government to deliver on its promise of less red tape

Business minister, Jo Swinson, said thousands of businesses are to be spared from red tape when she announced the interim results from the Company and Commercial Law Red Tape Challenge this week.

According to Swinson, half of the 115 regulations on the day-to-day running of a company and the preparing and filing of accounts are to be scrapped, merged or simplified.

Swinson said: "Businesses told us just how time-consuming some of the form filling is and how the rules they have to abide by are completely redundant. We have heard them loud and clear and are now taking action. We are always trying to make sure that companies can get on with what they're supposed to be doing – running a business and creating jobs to help make the economy stronger."

The Government has also announced specific proposals to lessen the red tape burden for companies with less than ten employees (micro-businesses) – affecting 1.2 million businesses in the UK.

Under its micros exemption proposal, micro-businesses would be able to prepare much reduced annual accounts including shortened balance sheets and profit and loss accounts. They will also remain exempt from the requirement to file the profit and loss account.

Other proposals include:

  • reform of the company and business names regime;
  • measures to simplify the regulations a company must abide by when displaying the company name at their premises, on paper or online;
  • other amendments to the Companies Act which will simplify the system for companies to use assets to raise finance, streamline company annual reporting requirements and repeal certain filing obligations when companies change auditors.

Danielle Stewart, chartered accountant at Baker Tilly Tax and Accounting, said: "It is great to see that the extensive work performed so far on the Company Law aspects of The Red Tape Challenge will now be progressed in so many ways. I am looking forward to the outcome of the next stage of the work with Companies House, which I believe will have even greater positive impact for all companies operating in the UK."