Does my UK subsidiary need an audit?

About the author

Katherine White

+44 (0)20 7556 1374
whitek@buzzacott.co.uk

What is a small group?

The whole worldwide group must meet two out of the three following criteria for two years in a row to qualify as “small”:

Turnover/revenue

• <£10.2m (net)
• <£12.2m (gross)

Total assets

• <£5.1m (net)
• <£6.1m (gross)

Average number of employees

• Not more than 50

Also, some groups are not eligible to qualify as small by their nature. This includes groups where any entity is: 

• a MiFID investment firm;
• a UCITS management company;
• authorised under the Banking Consolidation Directive or the Insurance Directives;
• an e-money issuer; or
• listed in an EEA state such as listed on the London Stock Exchange.

If you have one of the above in the group, you will probably know about it, but as the definitions are complex do feel free to contact us via the form below for assistance.

Are there any other exemptions?

If your UK company or LLP is a subsidiary of an EU parent company that prepares consolidated audited accounts that include the entity, then there is an exemption available if the parent guarantees the liabilities of the subsidiary. (s479A exemption)

Dormant companies and LLPs (i.e. those which have no transactions at all) are also exempt from audit. (s480 exemption)

What do I need to do if my subsidiary is not audit exempt?

The company’s directors must appoint a UK statutory auditor. The auditor will perform their work, which includes analysing the accounts and disclosures, looking at evidence that supports the transactions and balances and reviewing changes from one year to the next.

The auditor will report on whether or not the accounts are “true and fair”. The report will be included with the accounts when they are sent to the shareholders, Companies House (for filing on public record) and HMRC (with the tax return).

Get in touch

Please get in touch if you want to discuss the UK audit requirements or availability of audit exemption for your UK company or LLP.

You want a streamlined audit process that doesn’t get in the way of your day-to-day. With us, you get clear communication and realistic timetables, so you know when milestones are due and how to meet them. And because our service focuses on the key areas of your organisation, we won’t take up more of your time than strictly necessary.

We audit all sizes of unlisted companies and LLPs, whether you are a start-up or a large group. Our specialist areas include audits of:

• FCA regulated firms including hedge fund managers, investment advisory firms, private equity firms and brokers
• Professional practices including solicitors and architects
• UK subsidiaries of overseas groups
• Media, technology and IT companies
• Charities and not-for profit organisations
• Academies

During our audits we offer detailed feedback on your systems and controls – feedback you can act on because it’s designed to suit and add lasting value to your organisation.

As well as external/statutory audit, our assurance services include:

• Independent examinations
• Solicitors’ Accounts Rules
• Funder audits
• Assurance and internal compliance
• Due diligence assignments
• HR audits
• Grant audits
• We also assist FCA-regulated companies with client asset (CASS) reports

You’re our speciality. We audit businesses and charities like yours across the UK and globally, so we bring plenty of relevant experience to help everything run smoothly. And our people tend to stay with us, so you’ll often see familiar faces whose understanding of your situation grows every year.

To discuss your audit requirements, complete the form below.