Labour Euro MPs help small firms beat recession with £1,000 cut in red tape The European Parliament has voted today to exempt very small firms, known as micro-entities, from EU law on accounting standards, reducing the burden of red tape and helping them beat the recession. Local Labour Euro MP Stephen Hughes said: “as our small firms in the North East struggle to overcome the crisis I am determined to help them by cutting red tape. "It is vitally important that EU law does not over-burden very small businesses. This exemption means that very small firms will save around £1,000 in accountancy and audit fees.” Stephen added: “We have made a commitment in the EU to reduce burdens on business by 25% by 2012, and this law is an important step towards meeting that goal. Micro-entities are often the first step on the ladder to successful employers of the future, we need to nurture and support these businesses, not place extra burdens on them.” Notes for Editors: For more information contact Stephen Hughes on 07770 914526 or Cyndi Beaver on 077641 98400 Background This Commission proposal forms part of Europe's response to the financial crisis and is an important element of the European Small Business Act; a set of proposals to reduce burdens on Small and Medium Sized Enterprises (SMEs). The law will amend the 4th company law directive, dealing with accounting standards, to exempt micro-entities, the smallest category of SME, defined as firms with, for example, less than 10 employees and a small turnover. Over 5 million firms across Europe fall into this definition, and the European Commission estimates that savings for each firm will be around £1,000.