Increasing Company Size Thresholds

The new government has confirmed that it will be continuing with legislation to increase company size thresholds.

Legislation to increase the turnover and net asset size thresholds by approximately 50% is expected to be laid before parliament by April 2025. 

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EXPECTED NEW LIMITS

Medium Companies

	Current	New
Turnover	£36m	£54m
Gross Assets	£18m	£27m
Employees	250	250

Small Companies

	Current	New
Turnover	£10.2m	£15m
Gross Assets	£5.1m	£7.5m
Employees	50	50

Micro-Entities

	Current	New
Turnover	£632,000	£1m
Gross Assets	£316,000	£500,000
Employees	10	10

The benefits for entities that will fall into a lower band is a reduction in reporting requirements and therefore potentially a reduction in costs. The audit limits follow small companies limits therefore entities that will now qualify as small may not require a statutory audit.

Benefits of Electing to Have an Audit

There are still a lot of benefits to electing to have an audit:

• You’re growing – It may be more cost effective to continue with an annual audit rather than stop for a year or two and then restart the process.
• Shareholders/Directors are more comfortable with the assurance an audit provides.
• You are seeking funding/investment – an audit can make you accounts more credible to potential funders and investors.
• You are thinking of selling – having a regular audit gives you additional confidence over your records ahead of any due diligence processes.

And if an audit isn’t for you, there are other ways your auditor can help you:

• Systems and Controls reviews.
• Bespoke reports on any areas on the finances that you are concerned over.

Contact us at enquiries@fortus.co.uk, or call us on 01904 558 300 to discuss your audit needs.