§ Mr. LidingtonTo ask the President of the Board of Trade what were the results of the recent consultation on proposed amendments to the small companies audit exemptions; and what actions he plans to take. [21459]
§ Mr. LangI am pleased to announce that all three of our deregulatory proposals were endorsed by the public consultation, and I propose to implement them at once, in order to bring the benefits to small companies as soon as possible.
Our main proposal, to raise the audit exemption threshold to £350,000 annual turnover and so to abolish the statutory requirement for the "audit exemption report" which has been required since 1994 in the turnover band from £90,000 to £350,000, was supported by two thirds of the 272 respondents to the consultation.
This change will bring the deregulatory benefits of total audit exemption to an estimated further 200,000 small companies.
The current arrangements will be retained for those charities which have chosen to incorporate, pending an early consultation on options for harmonisation of the financial reporting requirements under charities legislation on the one hand and companies legislation on the other.
The two technical amendments on which we also sought views, relating to the treatment of companies which form part of groups and of dormant companies, enjoyed the overwhelming support of respondents. Companies which form part of groups will not be required to file audited individual accounts, provided that they are not otherwise excluded and that the turnover of the group does not exceed the threshold. The regulations clarify that dormant companies are automatically entitled to audit exemption on the same terms as qualifying non-dormant companies.
A summary of the responses to the consultation will be placed in the Libraries of both Houses of Parliament.