Audit rules change to ‘save SMEs £600m’
A MOVE to simplify audit rules could cut £600m from the costs faced by business, according to ministers.
The government is proposing to reduce the auditing burden on small companies and their subsidiaries.
UK rules are currently stricter than those laid down by the EU in terms of the way companies are classified as ‘small’.
The proposed changes would allow UK SMEs to claim exemption from audit if they meet two of three criteria relating to turnover, balance sheet turnover and employee numbers.
Ministers also want to change the law to allow most subsidiary companies to avoid compulsory audits.
Business minister Edward Davey said: “Over time, both the volume and costs of reporting requirements for UK companies have increased, and businesses have stressed to us the need for more flexible and targeted rules.
“Tackling these problems now will save UK SMEs millions every year and give them more opportunities to expand and grow their business.
“Audit is very valuable for many companies. But the proposals we’ve published today are aimed at removing EU gold plating and freeing up enterprise, which ultimately benefits the whole UK economy and will help put us on the path to long-term, sustainable growth.”
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