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21 October 2011

King Street industrial estate tenants could save with account changes

Small and medium sized enterprises in the UK could soon be making huge savings as the consultation on audit exemptions and change accounting framework is set to change.

There are over 100,000 UK businesses which could save in excess of £600 million in accountancy and administration costs every year under the new proposals to reduce financial reporting requirements.

The proposals will allow more small companies and subsidiaries to decide whether or not to have an audit. EU rules state that to be classified as "small" for accounting purposes then two out of three criteria must be met. A company must not have more than 50 employees, a balance sheet total no more than £3.26 million and no more than £6.5 million turnover. However to get audit exemption in the UK, small companies must fulfil both the balance sheet and turnover criteria.

The new proposal would mean a UK SME would be eligible for audit exemption by meeting any two of the three criteria, saving them an estimated 206 million per year.

Edward Davey, the Minister responsible for Corporate Governance said "Audit is very valuable for many companies. But the proposals we've published today are aimed at removing EU gold platting and freeing up enterprise, which ultimately benefits the whole UK economy and will help put us on the path to long-term, sustainable growth. So I encourage businesses to read the consultation document and share their views with us.

In addition to this the Government is also proposing to introduce new legislation in 2012 to exempt most subsidiary companies from a mandatory audit, providing their parent company is prepared to act as a guarantor against their debts resulting in estimated savings of £406 million per year but more importantly will encourage new enterprise to grow.

If you have a small or medium sized enterprise then an industrial unit, small warehouse or workshop at King Street Industrial Estate could be just what you need to prosper.

To find out more about Industrial units at King Street Industrial Estate then call our Estate Manager on 01778 560693 and select option 1 or alternatively send us an email.