New audit threshold confirmed for January
The audit threshold for small companies will be raised to £5.6m in January next year, meaning that a further 69,000 businesses will be exempt from the requirement to have their accounts audited.
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.