When is an Audit required?
Whether a private limited company in the UK requires a statutory Audit by law depends on its size and financial activity. This is commonly known as the Audit threshold, which draws a clear line separating companies that must have an Audit from those that may not need one.
If your financial year begins on or after 6th April 2025, you are required to conduct an Audit annually if any two of the following criteria are met during that year, and have been met for two continuous years:
- Your company generates a turnover greater than £15 million
- The value of your company's gross assets exceeds £7.5 million
- Your company employs more than 50 people
- Your company generates turnover greater than £10.2 million
- The value of your company’s total assets exceeds £5.1 million
- Your company employs more than 50 people
There are, however, several company types which require an annual statutory Audit regardless of their turnover, assets, or employee count. These also include company types listed in the table below:
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Any public company (excluding dormant public companies
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An authorised insurance company
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A subsidiary within a group, depending on the overall group size
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A UCITS management company
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Any corporate body whose shares have been traded within a regulated market
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A company that carries on investment market activity
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Companies that issue e-money
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Companies involved in banking
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A "special register" body or an "employers' association"
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A scheme founder of a Master Trust pension scheme
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Any investment firm regulated by MiFID
Make sure you understand your obligations
Some companies may have an Audit, whether voluntarily or through a legal requirement, when they fall below the audit threshold, such as UK subsidiaries of larger multi-national groups. This is why it is essential to seek guidance from a qualified auditor if you are unsure about your obligations, particularly as some of the rules above can be complex.
If your company has not yet been audited, we strongly recommend seeking guidance from the Shorts Audit team. Even if your company does not require an Audit legally, it may still be highly beneficial.
The Audit process can benefit your business in several ways, such as enhancing your credibility, improving your fiscal management, detecting errors and potential fraud, ensuring you comply with best practices, and improving your access to financing and investment.
Our team can offer you valuable guidance and strategic advice, along with assurance and assistance that you are complying with all regulatory requirements. If you require any support in this area, we encourage you to reach out to our team today.
