Expert view: Size matters in new company audit rules

By Dean

02 Jan 2013

Graham Wilson of Beever and Struthers explains how the government’s changes in the requirements of small business reporting may affect you.
Up until 1 October, the rules for determining whether a company was “small” (for filing abbreviated accounts at Companies House) and whether it was audit exempt, were similar but not identical.Now they are and consequently, the government estimates some 36,000 small companies will no longer need an audit. The beneficiaries will mainly be small property investment companies and those with high turnovers and low margins.

The change applies to accounting years ending on or after 1 October 2012. But if your company has a 30 September year-end, there’s no need to wait a year for audit exemption. Simply run your accounts to 1 October. It’s perfectly legal – see section 390(3)b of the Companies Act.

A less well-received rule change seeks to exempt from audit 83,000 subsidiary companies, but only if their parent company guarantees their liabilities. If groups were that concerned about the burden of audit and that indifferent about limited liability, their businesses would be structured as one limited company requiring only one audit.

Finally, 67,000 dormant subsidiaries will no longer need to prepare or file annual statutory accounts, provided there is a parent company guarantee. Because many dormant companies exist with a few pounds of share capital to preserve a business name, this rule change might have some takers.

Retaining a dormant subsidiary with significant asset value is a high risk strategy. You should at least think about dividends and possibly a capital reduction - then pray for two years that an unforeseen liability doesn’t arise.

Graham Wilson PartnerBeever and Struthers

Enjoyed this? Read more from Dean

Latest news

1

Double-digit growth sees Inspired near £100m revenues Mark Dickinson Inspired Plc

Double-digit growth sees Inspired near £100m revenues

26 Mar 2024

2

Five-fold growth for Chorley safety products firm Hispec

Five-fold growth for Chorley safety products firm

26 Mar 2024

3

How the UK’s strategy to reduce net migration affects care work AdobeStock_89838327 (1).jpeg.jpg

How the UK’s strategy to reduce net migration affects care work

28 Mar 2024

4

Dealmakers: Star Tissue takes a leading roll Khalid Saifullah

Dealmakers: Star Tissue takes a leading roll

28 Mar 2024

5

Tips for surviving Lancashire's pothole plague

Tips for surviving Lancashire's pothole plague

28 Mar 2024

Hwc 2024 Email Signature 980x120
Background image for hub sign up block

LBV Hub

Reach 50,000 members of the Lancashire business community

Post your news
Post your events
Post your offers
Company profile
Social reach
Magazine coverage
Sign-up
Events
Business Networking in Burnley - BNI Kudos
EVENT LISTING BNI Kudos.png.png
LBV Hub Networking
28 Mar 2024

Business Networking in Burnley - BNI Kudos

Prairie Sports Village, Windemere Avenue, Burnley, BB10 2FU

06:45 - 08:30

Business Networking in Lancaster - BNI Castle
EVENT LISTING BNI Castle.png.png
LBV Hub Networking
28 Mar 2024

Business Networking in Lancaster - BNI Castle

Vale of Lune RUFC, Powder House Lane, Lancaster, LA1 2TT

06:45 - 08:30

Business Networking in Preston - BNI Brunch
EVENT LISTING SIZING Brunch .png.png
LBV Hub Networking
29 Mar 2024

Business Networking in Preston - BNI Brunch

Samlesbury Preston Hotel, Preston New Road, Preston, PR5 0UL

09:30 - 11:00

Business Networking in Blackburn - BNI Infinity
EVENT LISTING BNI Infinity.png.png
LBV Hub Networking
29 Mar 2024

Business Networking in Blackburn - BNI Infinity

Hampton by Hilton, 2 Frontier Ave, Blackburn, BB1 3AL

06:30 - 08:30

Business Networking in Chorley - BNI Endeavour
EVENT LISTING SIZING Endeavour.png.png
LBV Hub Networking
02 Apr 2024

Business Networking in Chorley - BNI Endeavour

Oak Royal, Bury Lane, Chorley, PR6 8SW

06:30 - 08:30

Business Networking in Blackburn - BNI Vista
EVENT LISTING SIZING Vista.png.png
LBV Hub Networking
02 Apr 2024

Business Networking in Blackburn - BNI Vista

Hampton by Hilton, 2 Frontier Ave, Blackburn, BB1 3AL

06:45 - 08:30

Business Networking in Preston - BNI Diamond
EVENT LISTING BNI Diamond.png.png
LBV Hub Networking
03 Apr 2024

Business Networking in Preston - BNI Diamond

The Marriot Hotel, Garstang Road, Broughton, PR3 5JB

07:15 - 09:00

Business Networking in Lancaster - Eden Business Network
EVENT LISTING Eden Business Network.png.png
LBV Hub Networking
03 Apr 2024

Business Networking in Lancaster - Eden Business Network

The Borough, 3 Dalton Square, Lancaster, LA1 1PP

18:30 - 20:30

Business Networking in Accrington - BNI Zeus
EVENT LISTING SIZING Zeus.png.png
LBV Hub Networking
03 Apr 2024

Business Networking in Accrington - BNI Zeus

The Mill House, Corn Mill Yard, Accrington, BB5 5HX

06:45 - 08:30

Business Networking in Lancaster - BNI Castle
EVENT LISTING BNI Castle.png.png
LBV Hub Networking
04 Apr 2024

Business Networking in Lancaster - BNI Castle

Vale of Lune RUFC, Powder House Lane, Lancaster, LA1 2TT

06:45 - 08:30

Business Networking in Burnley - BNI Kudos
EVENT LISTING BNI Kudos.png.png
LBV Hub Networking
04 Apr 2024

Business Networking in Burnley - BNI Kudos

Prairie Sports Village, Windemere Avenue, Burnley, BB10 2FU

06:45 - 08:30

Business Networking in Blackburn - BNI Infinity
EVENT LISTING BNI Infinity.png.png
LBV Hub Networking
05 Apr 2024

Business Networking in Blackburn - BNI Infinity

Hampton by Hilton, 2 Frontier Ave, Blackburn, BB1 3AL

06:30 - 08:30

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more Lbv115 Online Graphic
Subscribe now

Weekly news bulletin