PracticeConsultingGovernment raises audit threshold to £1m

Government raises audit threshold to £1m

Byers announces £1m audit threshold - for now Trade secretary Stephen Byers today announced that the government could raise the statutory audit threshold to £4.8m.

Speaking on the BBC Radio Today programme, Byers said he was raising the threshold to £1m now and would consider a further increase to £4.8m once the Company Law Review working party had finished its work.

Byers, who is due to speak to the British Chambers of Commerce’s conference this afternoon, is expected to include the announcement in a wider speech on the government’s intention to cut red tape. The move would free around 150,000 small companies from the need to produce independently audited annual accounts.

Ministers had been widely expected to set a new level of £1m. But increasing the threshold to as much as £4.8m would take the UK above the threshold of £4.2m which other European countries use.

It is not yet clear, however, whether there will be any conditions attached to a £4.8m level such as an independent review.

When the consultation exercise was completed on whether the threshold should rise from its current £350,000 level, officials pledged ministers would announce their decision in the New Year.

The DTI received more than 100 responses to its consultation paper.

Small practitioners would be most directly affected by a rise in the currentthreshold from its £350,000 level, support a threshold increase of far morethan the £1m which the government is currently tipped to favour.

Also at the conference, shadow chancellor Michael Portillo is expected toaccuse Labour of ignorance and arrogance in its policies for business.

And companies have also cited the Working Families Tax Credit, minimum wage and employment relation regulations as additional small business pressures needing attention.

Chris Humphries, director general of the British Chambers of Commerce says there is growing disillusionment with the government’s business credentials and a feeling that old Labour tendencies are coming back.

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