On 26 January 2016, the government confirmed that the audit exemption threshold will be raised to the maximum allowed under the Audit Regulation and Directive.
Companies will no longer be required to have an audit for the financial years commencing on or after 1 January 2016 if at their balance sheet date they satisfy at least two of the three following criteria, in general, for two consecutive financial years:
- Turnover ≤ £10.2m
- Balance sheet total ≤ £ 5.1m
- Number of employees ≤ 50
This brings into line the criteria to qualify as a small company in the UK and the audit exemption regulations, meaning that eligible small companies in the UK will not require a statutory audit.
In a written statement laid before the House of Lords, BIS Minister Baroness Neville-Rolfe said that the government opted to keep the framework as simple as possible.
The audit option will remain open for small companies on a voluntary basis.
The rules for UK companies that are a part of a group remain unchanged where for the purposes of audit exemption eligibility, the worldwide group turnover, balance sheet total and number of employees must be considered rather than the UK company on its own.
For the full announcement please click here or contact Andy Bewick