Do I need to have my accounts audited?
Trying to stay on the right side of the Tax Man is a constant struggle for growing SME businesses who want to be compliant and avoid hefty fines. So when the issue of auditing company accounts comes up, many owners panic – is this yet another thing they must do regularly? Here’s our summary of the guidelines to help you with what your business needs to do:
Businesses that do – and don’t – need auditing
The good news is that most businesses do not need to have their accounts audited unless:
- Your shareholders demand one.
- Your articles of association call for one.
For sole traders and microbusinesses, the chances of needing to carry out an audit are slim. HMRC have also relaxed their own rules about auditing, helping to reduce red tape; the only reason HMRC would demand audited accounts are:
- Your annual turnover is more than £6.5 million.
- You hold assets worth more than £3.26 million.
- You employ less than 50 workers.
Unfortunately for every rule, there is an exception. In the following unusual circumstances, HMRC will want to see audited accounts:
- You are a public company (PLC).
- Your business is a subsidiary of another.
- You operate in the insurance or banking industries.
- Your business has had shares traded on a regulated market in a European state.
The fine print
These headline exemptions each have their own nuances (this being a financial issue, it’s got heavy regulations and needs careful understanding), so you should to consult with a suitably experienced accountant to ensure you stay on the right side of the law. Get in touch with 3 Wise Bears to discuss your options – our advice will mean you have one less headache to cope with come tax return time.
