Most small private limited companies don’t need an audit of their annual accounts - unless the company’s articles of association say it must or enough shareholders ask for one.

Your private limited company’s accounts may be exempt from needing an audit (reviewed and confirmed by an independent accountant).

If your company financial year ends on or before 30 September 2012

Your company may qualify for an audit exemption if your company has both:

  • an annual turnover of no more than £6.5 million
  • assets worth no more than £3.26 million

If your company financial year ends on or after 1 October 2012

Your company may qualify for an audit exemption if it has at least 2 of the following:

  • an annual turnover of no more than £6.5 million
  • assets worth no more than £3.26 million
  • 50 or fewer employees on average

Audit exemption statement

You must include the following statement on the balance sheet of your accounts if you’re using an audit exemption.

For the year ending [your company’s year end date], the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476.

The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

These accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies’ regime.

If shareholders ask for an audit

Even if your company’s usually exempt from an audit, you must get your accounts audited if shareholders who own at least 10% of shares (by number or value) ask you to. This can be an individual shareholder or a group of shareholders.

They must make the request in writing and send it to the company’s registered office address.

The request must arrive at least 1 month before the end of the financial year that the audit is being asked for.

Companies that must have an audit

Some companies must have an audit even if they meet the rules for not having one.

Your company must have an audit if at any time in the financial year if it’s been:

  • a public company (unless it’s dormant)
  • a subsidiary company (unless it qualifies for an exception)
  • an authorised insurance company or carrying out insurance market activity
  • involved in banking or issuing e-money
  • a Markets in Financial Instruments Directive (MiFID) investment firm or an Undertakings for Collective Investment in Transferable Securities (UCITS) management company
  • a corporate body and its shares have been traded on a regulated market in a European state

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