While the revised rules will create a less onerous reporting environment for some businesses and reduce the number of businesses requiring statutory audits, there will likely be a greater onus placed on directors and managements when it comes to financial transparency, according to Sussex and South East accountancy firm, Carpenter Box.
The incoming definitions of company size will see the turnover threshold for micro companies with an average of 10 employees increase to £1m from £632k (gross assets increased to £500k from £316k); small companies will be defined as employing an average of 50 people or less, with a turnover of up to £15m, up from £10.2m (gross assets up to £7.5m from £5.1m); and medium companies will be newly defined as employing an average of 250 people or less, with a turnover threshold of up to £54m, from £36m (gross assets of £27m from £18m).
Carpenter Box Partner, Kristina Perry, commented: “The upcoming changes to UK company size thresholds will mark a significant shift in the regulatory landscape. For affected businesses, depending on their size, this will mean less onerous reporting, audit exemptions and simpler annual accounts. However, for some companies, this will place additional responsibilities on directors and management for financial transparency and accountability, which may require additional internal resource or specialist external support.”
To prepare for these changes, Carpenter Box recommends that businesses should initially assess whether the revised thresholds will change their size classification. They should also inform stakeholders of the changes and the steps being taken to maintain transparency and accountability. Finally, a consultation with their accountants or auditors will help smooth the path to the new regime.
If you need any assistance, please contact Carpenter Box on 01903 234094 or visit www.carpenterbox.com.
