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Audit Exemption

March 2004

 

The regulation implementing the increases in the small, medium-sized and audit exemption thresholds was laid before Parliament on 9th January 2004 and came into force on 30th January 2004.  The new thresholds apply to financial years ending on or after 30th January 2004.  There is a two month delay to allow shareholders a period in which they can consider whether they wish to require the company in which they hold shares to obtain an audit. 

The new audit exemption threshold will take effect in relation to financial years ending on or after 30th March 2004.
 
The DTI news release P/2004/18 confirms that a further 69,000 companies will be exempt from the requirement to have their accounts audited, following the increase in the threshold from £1 million annual turnover to £5.6 million turnover.  The measure is expected to save companies at least £94 million a year.  In addition the news release states that the increase to the EU maximum in turnover and balance sheet totals for small and medium-sized companies will allow more SME's to take advantage of the 40 per cent plant and machinery allowance providing a cashflow benefit of nearly £400 million over the next three years. 
 

For small companies the threshold for balance sheet totals increases to £2.8 million and for medium companies the thresholds for turnover and balance sheet totals increase to £22.8 million and £11.4 million respectively.  Please see also the new changes to Financial Thresholds April 2008

  

                                                    

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