As the United Kingdom is no longer within the European Union the government is not tied into the maximum EU thresholds.
The Government announced on 18th March 2024 the proposal to increase these thresholds. These proposed changes are part of the ongoing reforms aimed at reducing the regulatory burden on small and medium-sized enterprises (SMEs) while modernising the UK’s corporate governance framework. The new thresholds, if adopted, will potentially exempt a larger portion of businesses from statutory audit requirements, significantly impacting both companies and audit practices across the country.
Overview of the Proposed Changes
Under current regulations, businesses must meet at least two of the following criteria to be exempt from a statutory audit:
- Turnover: Less than £10.2 million
- Balance sheet total assets: Less than £5.1 million
- Number of employees: Fewer than 50.
The proposed changes, would increase these thresholds as follows for financial years starting on or after 1st October 2024:
- Turnover threshold: Raised from £10.2 million to £15 million
- Balance sheet total assets: Increased from £5.1 million to £7.5 million
- Employee threshold: To remain unchanged at 50 employees
These proposed increases in thresholds are part of broader efforts to enhance the business environment for smaller companies by reducing the cost and administrative burden associated with statutory audits. If these changes come into effect, many more companies will qualify for audit exemptions, freeing up resources for growth and innovation.
Further Information
To arrange a meeting to discuss any audit matters you may have ahead of these changes, please contact your usual NRB advisor or our audit team.
William Waterworth – Audit Manager
George Hough – Audit Supervisor
There has been no communication since the change in government in relation to the above proposal. The information and advice provided here is based on the current guidelines provided by the government. NRB would always advice you consult with a professional who can provide up to date information.
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