Audit exemption eligibility (2024)

Table of Contents

Charities Companies Subsidiaries

Learn whether your organisation qualified for audit exemption for reporting periods beginning on or after 1 January 2016, under the Companies Act 2006 as amended by SI 2015/980. ICAEW's Technical Advisory Service provides guidance covering: group eligibility; eligibility of UK subsidiaries; and audit exemption conditions.

This section provides a high level summary of the audit exemption thresholds in the UK. Detailed guidance can be found at the links provided.

Charities

Any charity that falls below a gross income of £1,000,000 or less for accounting periods ending on or after 31 March 2015 (£500,000 or less for prior accounting periods), unless both their gross assets exceed £3.26m and their gross income exceeds £250,000), can choose to opt out of a full audit. Most are required to obtain an alternative assurance service, independent examination.

Join theICAEW Charity and Voluntary Sector Interest Group to access specialist helpsheets including further detail on Charity Financial Reporting and Scrutiny.

Companies

Companies that qualify as small companies under Companies Act 2006 are usually exempt from audit, unless they are members of a group or are charities and required to follow the charity audit thresholds.

The definition of a small company: a company is small if for both this year and last year it was not ineligible, and it met two out of three of the following criteria:

	For periods beginning on or after 1 January 2016:
Turnover	<£10.2m
Total assets	<£5.1m
Number of employees	<50

Subsidiaries

Subsidiary companies within a group can also be exempt from audit, if they meet certain criteria and if the parent company provides a guarantee of all outstanding liabilities at the end of the financial year. Detailed guidance on the use of the parent guarantee is provided in technical release TECH 07/13BL.