Last updated: 13 November 2020
As a UK company or LLP, there are currently three ways in which you can be exempt from having an audit:
- By being small;
- By being a subsidiary; or
- By being dormant.
However, the exemption for subsidiaries is going to change as a result of Brexit.
Pre vs. post Brexit
Previously, UK subsidiaries of any size could claim audit exemption if their accounts were included in their EEA parent’s consolidated accounts (provided certain conditions were met).
After Brexit, the subsidiaries exemption will only be available to UK companies and LLPs with a UK parent. So if your parent is in the EEA, you will no longer be able to apply the exemption for subsidiaries and might need to have an audit.
This change applies for accounting periods starting on or after 31 December 2020, so for most companies and LLPs that’s the accounts for the year ending 31 December 2021 or later.
Impact on UK subsidiaries whose parent is in an EEA member state
Unless you are part of a small group, you will need an audit going forward.
If you are part of a small group, you can still take advantage of the exemption for small companies and LLPs.
Impact on UK subsidiaries whose parent is in the UK
There is no change for these subsidiaries, but it is worth remembering that UK groups of any size can still take advantage of this exemption. The main qualifying criteria is that the parent must guarantee all of the subsidiary’s liabilities in respect of that year. Further information can also be found here.
If you are unsure whether or not your company or LLP needs an audit, get in touch via the form below.
Last updated: 13 November 2020
As a UK company or LLP, there are currently three ways in which you can be exempt from having an audit:
- By being small;
- By being a subsidiary; or
- By being dormant.
However, the exemption for subsidiaries is going to change as a result of Brexit.
Pre vs. post Brexit
Previously, UK subsidiaries of any size could claim audit exemption if their accounts were included in their EEA parent’s consolidated accounts (provided certain conditions were met).
After Brexit, the subsidiaries exemption will only be available to UK companies and LLPs with a UK parent. So if your parent is in the EEA, you will no longer be able to apply the exemption for subsidiaries and might need to have an audit.
This change applies for accounting periods starting on or after 31 December 2020, so for most companies and LLPs that’s the accounts for the year ending 31 December 2021 or later.
Impact on UK subsidiaries whose parent is in an EEA member state
Unless you are part of a small group, you will need an audit going forward.
If you are part of a small group, you can still take advantage of the exemption for small companies and LLPs.
Impact on UK subsidiaries whose parent is in the UK
There is no change for these subsidiaries, but it is worth remembering that UK groups of any size can still take advantage of this exemption. The main qualifying criteria is that the parent must guarantee all of the subsidiary’s liabilities in respect of that year. Further information can also be found here.
If you are unsure whether or not your company or LLP needs an audit, get in touch via the form below.
Does my UK subsidiary need an audit?
Audit and assurance
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