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18 January 2016

The recent change in audit thresholds (the level at which a company or group is required to have a statutory audit of its’ annual accounts) could impact care operators.

For accounting periods commencing on or after 1 January 2016, companies will qualify as small sized and exempt from audit if they meet 2 out of 3 criteria being:
  • Turnover less than £10.2m (or 12.2m for groups);
  • Gross assets (fixed assets plus current assets) less than 5.1m (or 6.1m for groups); and
  • Average employee numbers of less than 50 (also 50 for groups).

The 2 out of 3 criteria must be met for 2 of the last 3 financial periods based on the new size limits.

Up to this point, comparatively small care businesses in terms of turnover (fee income) have been required to have an audit as a result of property cost and other assets and number of employees (the average employee limits are based on all employees under a contract of employment rather than full time equivalents).

The new size criteria will mean that some care businesses will now be able to claim an audit exemption should they so choose (provided that an audit is not required by other interested parties e.g. the bank or a minority shareholder).

A company or group qualifying as small is also be able to file abbreviated accounts at Companies House, which greatly reduces the information available on public record.

There may be opportunities to dispense with the audit requirement by changing the Company year end – if you would like to discuss this with us, please contact Andrew Brookes or Simon Worsley.


Andrew Brookes - Partner and Head of Healthcare
Andrew Brookes
Partner and Head of Healthcare Contact details