Small Companies Audit Threshold Increased
Many local business run as limited companies. This ensures the shareholders have limited liability and is often a cheaper tax environment. The Government has announced that a large number of such companies will be exempt from having to have their accounts audited, which can be expensive and time consuming. They are raising the audit threshold for small companies from 1m annual turnover to £5.6 million. 69,000 companies will benefit from this provision and the measure is expected to save companies at least £94 million a year.
Tony Forster, a partner in our Company Commercial Department, says “Most small companies will no longer be required to have their accounts audited. We act for lots of local businesses who get confused over what their legal requirements are. Some would benefit from incorporating their business and transferring the assets to their new company. Others operate as a company already but have no agreement between the shareholders as to what happens if one of them dies or wants to leave. It is important where possible to put in place shareholders’ agreements so that everyone knows where they stand and so that those holding a minority of the shares are appropriately protected.”
For further information contact Tony Forster on (0117) 929 0451 or e-mail tforster@metcalfes.co.uk
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