SMEs saved an average of £4,500 each in 2015
24 January 2017
Changes to audit exemptions in 2012 are estimated to have brought about millions of pounds worth of savings for small and medium-sized enterprises (SMEs).
Research published by the Department for Business, Energy and Industrial Strategy found that changes to the small companies audit exemption rules by the government in 2012 led to an estimated £4.6 billion in savings for SMEs in 2015.
More than a million small businesses are exempt from audit, which is leading to individual savings of thousands of pounds per year, however only 30% of newly eligible SMEs are currently taking advantage of audit exemptions.
The poll of 400 small businesses affected by the changes found that three out of four SMEs undergoing audits felt they would benefit from exemptions, while 80% cent of firms strongly agree that taking up audit exemptions helps reduce burdens for small businesses.
Newly eligible SMEs that were polled overwhelmingly felt they had benefited from the changes, saying they had saved money and time because of the reforms. However, the research also shows that despite the success of the rule changes, only 30% of newly eligible SMEs are currently taking advantage of audit exemptions.
Since restructuring the small companies audit exemption in 2012, companies and limited liability partnerships have not been required by law to undergo audits if they meet just 2 of the following criteria:
- fewer than 50 employees
- an annual turnover of no more than a maximum amount (now £10.2 million)
- assets worth no more than a maximum (now £5.1 million).
This replaced previous rules where often all three criteria had to be met.
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