If you run a business, there’s some good news coming your way! The UK government is shaking up the audit rules, making life easier for thousands of companies. From 6 April 2025, the financial thresholds that determine whether you need a statutory audit are increasing. Here’s what’s changing:

New Audit Thresholds

To be exempt from an audit, your business must meet at least two of these three criteria:

• Annual Turnover: Going up from £10.2 million to £15 million
• Total Assets: Increasing from £5.1 million to £7.5 million
• Number of Employees: Staying the same at 50 or fewer

What does this mean? Around 132,000 businesses will no longer need to go through the hassle (and cost) of a statutory audit.

Why the Change?

The government wants to reduce red tape and let businesses focus on growing rather than getting bogged down in compliance. This is especially helpful for small and medium-sized companies that were just over the old limits.

What Should You Do?

If your business falls below the new thresholds, you won’t have to do a mandatory audit anymore. However, that doesn’t mean audits are useless. Many businesses still choose to have voluntary audits to keep their finances transparent, build trust with investors, and improve internal processes.

If you’re growing fast and might exceed these new limits soon, it’s a good idea to start planning now. Strong internal controls and good financial management will help you stay on top of things.

When Do These Changes Kick In?

The new rules apply to financial periods starting on or after 6 April 2025. For example, if your financial year runs from 1 January to 31 December, you’ll be under the new thresholds for the 2026 financial year.

Final Thoughts

For many businesses, this is a welcome change that cuts costs and reduces admin headaches. But it’s still worth checking with an accountant to make sure you’re making the best decision for your business.

Exciting times ahead—less paperwork, more time to focus on growth!