New audit and accounting rules for UK small businesses

The Financial Reporting Council (“FRC”) and the Department for Business Innovation and Skills (“BIS”) have recently announced their plan for implementation of a new EU Accounting Directive in the UK which will affect the accounting and statutory reporting requirements of thousands of small UK businesses.

In June 2013, a new Accounting Directive was approved by the European Union and introduced changes to small company reporting. These changes include restricting the disclosures that the UK and other EU member states can require small companies to provide in their annual accounts. The EU Directive also increased the threshold that must be breached before a company ceases to qualify as ‘small’. An estimated 11,000 additional UK companies will be able to take advantage of the small company accounting regime once the new regulations take effect.

The revised thresholds for a small company are as follow:

audit-accounting-new-rules

The UK has until the middle of next year to put the new EU directive into company law. A bill is due before parliament in early 2015 and the changes are expected to apply for accounting periods beginning on or after 1St January 2016.

How we can help?

If you are a small company under the small company accounting regime or if you are not sure whether you will require an audit next year, please do not hesitate to contact our Senior Audit Manager Jonty Clarke on 01491 579740 or via email on jclarke@hmtllp.com. Our specialist Audit and Tax Advisory team can answer your questions and help you find the right accounting solution for your business.