100,000 small businesses could benefit from audit exemption
Government hopes plans could save firms more than £200m
Around 100,000 small firms could be granted exemption from existing audit requirements, if new government plans are enacted.
The Department for Business, Innovation and Skills (BIS) has opened a period of consultation on the proposals, which it claims could yield a combined saving of more than £200m for Britain’s smaller businesses.
The proposed changes would widen the category of businesses eligible for an audit exemption, and bring Britain’s auditing system into line with EU rules.
Under current UK law, a company cannot receive an audit exemption unless its balance sheet totals less than £3.26m, and its profits are less than £6.5m.
However, if the BIS changes are passed, businesses will have to meet only one of these two criteria.
Through the new plans, BIS is hoping to tackle EU ‘gold plating’, whereby the government tacks additional and unnecessary regulations onto European directives – placing British firms at a competitive disadvantage.
Business minister Ed Davey said: “The proposals we’ve published today are aimed at removing EU gold plating, and freeing up enterprise.
“Over time, both the volume and costs of reporting requirements for UK companies have increased. Tackling these problems now will save UK small and medium-sized businesses millions every year.”