Qualifying for a total audit exemption
Although all companies and limited liability partnerships (LLPs) have to Companies House, these accounts do not have to be audited for financial years starting before 6 April 2008 if you:
qualify as a small company or LLP for the purposes of filing abbreviated
For financial years starting on or after 6 April 2008, to qualify for total audit exemption, a company must:
have a turnover of not more than £6.5 million
In these cases you can submit audited accounts if you wish, but it's not compulsory. Bear in mind there can be drawbacks. Banks, credit managers and your customers and suppliers rely on information from Companies House to assess creditworthiness and will be reassured by an independent audit. If you decide to submit audited accounts, you must appoint an auditor.
Recent changes to the rules have allowed some small financial services businesses and some small businesses, such as home-finance providers, that comply with Sharia law to qualify for an audit exemption.
However, businesses taking advantage of the audit exemption should be aware that shareholders who own 10 per cent or more of the company still have the right to ask for an audit. There are a number of exceptions to these criteria for audit exemptions.
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