New audit threshold confirmed for January

Link: More companies to be exempt from audit

DTI secretary Patricia Hewitt made the announcement today as part of a series of moves to cut red tape for small and medium-sized companies.

The threshold will increase from £1m annual turnover to £5.6m turnover and is expected to save companies at least £94m a year, according to the DTI.

Hewitt also announced that the government is raising the turnover limit that defines small and medium-sized companies, with more companies being able to take advantage of tax incentives on information and communication technologies (ICT) equipment and plant and machinery.

The new limits for medium-sized companies is £22.8m of turnover.

Both the ICAEW and ACCA have expressed concerns about raising the audit threshold, citing worries about money-laundering and fraud.

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