Moves to raise the audit threshold for small companies to Ј5.6m have been welcomed by the Secretary of State for Trade and Industry, Patricia Hewitt, as attempts to cut the red tape burden on SMEs.
With the threshold increasing from Ј1m annual turnover to Ј5.6m, a further 69,000 companies will be exempted from the requirement to have their accounts audited. Pointing out that the measure is expected to save companies at least Ј94m a year, the Secretary of State also announced that the government is raising the turnover limit that defines small- and medium-sized companies (SMEs). This will mean that more companies will be able to take advantage of tax incentives on ICT equipment and plant and machinery.
