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Welcome to our monthly tax newsletter designed to keep you informed of the latest tax issues. We hope you enjoy reading the newsletter; remember, we are here to help you, so please contact Adrian Broadbent or any of our team members for any assistance.
Changes to audit thresholds for Charities
The government has announced the following changes to the audit threshold for charities with accounting periods ending on or after 31 March 2015:
Increasing the income threshold from £500,000 to £1 million
Increasing the aggregate group income threshold at which parent charities should have group accounts audited from £500,000 to £1 million
Increasing the preparation threshold for group accounts from £500,000 to £1 million
Adding the Institute of Financial Accountants (IFA), subject to the submission of appropriate evidence, to the list of recognised professional accountancy membership bodies whose appropriately qualified members can carry out independent examinations of the accounts of charities with incomes that are more than £250,000
Interestingly, the government intends to leave the income and asset component of the asset threshold unchanged at this point in time, i.e. assets worth more than £3.26 million and income of more than £250,000 (together, “the asset threshold”).
Changes to audit thresholds for Companies
One in five medium-sized accounting firms reckon that about half of their clients will decide not to have an annual audit after the turnover threshold for having an audit is increased in 2015, research suggests.
Currently, businesses with gross assets of less than £3.26m, or turnover less than £6.5m are not required to get an audit.
When an EU accounting directive is introduced in the UK, in early 2015, these thresholds are expected to increase to £5m-plus and £10m respectively.
As a holder of a practising certificate with the Institute of Financial Accountants we will be able to save companies and charities who qualify for the new exemptions on their present accounting fees.