Draft Limited Liability Partnerships, Partnerships and Groups (Accounts and audit) regulations 2016

Kit Malthouse Excerpts

Thursday 21st April 2016 General Committees

[Kit Malthouse (North West Hampshire) (Con)]

I am hesitant to rise and delay the Committee, because I realise that I will probably not be called to sit on one of these Committees again, but I have a short question for the Minister about which I am happy for him to write to me. I welcome the thrust of the proposal, although before I continue, I should declare that I am a member of the Institute of Chartered Accountants.

I am getting a little confused, as, I think, are a lot of small businesses, about the interaction between the EU-adopted international financial reporting standards, financial reporting standards 101 and the new FRS 102. As I understand it, small companies can choose which of those three they wish to participate in and therefore what disclosure requirements they have to make in their annual accounts. Will that apply to the new limited liability partnerships coming into the regime?

Does the Minister recognise that although the Government are taking away regulation with one hand, FRS 102, particularly in its small-entities regime, is adding significant regulation to small businesses? They will have to make significant extra disclosures and do things that directors of very small businesses have not had to do, such as making estimates that they have not had to make before, and that will necessarily put a greater burden on them at year end.

My final question is about the Government’s much-heralded plan to require small businesses to produce quarterly tax returns—the Government say they are quarterly updates, but most small businesses are interpreting them as quarterly tax returns. Will the complicated accounting requirements of the small-entities regime—financial reporting standards 101 and 102, or EU-adopted IFRS—apply on a quarterly basis to small businesses for corporation tax reporting? That would fulfil the fear of the Federation of Small Businesses and other groups that the quarterly regime being brought in by the Treasury may be more complicated than it first appears.