The Government has begun a public consultation seeking views on proposals to reduce the number of companies required to submit audited accounts.
Under EU regulations there are three criteria under which companies can be categorised as “small” for accounting purposes:
– they should have no more than 50 employees;
– their balance sheet should total no more than £3.26 million; and
– their annual turnover should be no more than £6.5 million.
In the UK companies must currently fulfil both the balance sheet and turnover criteria in order to be exempt. Under the new proposals companies will only need to meet any two of the three criteria to qualify for an exemption. It is estimated that this will result in 36,000 companies being released from the need to have an audit, saving businesses in the UK an estimated £206m a year.
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