OK you’re a small business so you don’t need to have your financial statements audited, right? Well, it’s not quite as simple as that. Generally, since the Companies Act 2006, small companies have rarely needed to get an audit. Great news: an audit can be pretty costly in terms of time and money, and for many owner managed businesses appears to add little or no value. To count as small, you just need to meet 2 out of 3 criteria for 2 years in a row, which for accounts ending in 2016 are:
- Turnover less than £10.5million
- Total assets less than £5.1 million
- Fewer than 50 employees
If this describes you then you probably won’t need an audit -Yay (although you do still need to prepare and file financial statements).
But watch out. If you are part of a group, the size rules apply to the whole group, wherever in the world the parent company sits, and regardless of whether its’ local regime requires an audit. This means that your super-new tiny start up UK subsidiary might just need an audit after all. There are some ways of avoiding it, but it’s a bit complicated!
In some cases, you might choose to have an audit even if you don’t have to. Crazy right? Well sometimes shareholders might want one, or your bank, or your favourite customer.
So if you can avoid having an audit: great. But that doesn’t mean your accounts aren’t important, and an awesome bookkeeper like Merryhill can make it all run like clockwork. And if you do happen to need an audit, well we can liaise with your auditor so you hardly know it’s happening.
Still not sure whether you need to audit? Contact us and we will help you decide.