Audit exemption for UK subsidiaries
My client is an American company with a UK subsidiary. It is not a parent company, nor is its ultimate parent listed. It clearly meets the size criteria for audit exemption as a standalone company, and qualifies to file abbreviated accounts.
I have spoken to some experienced auditors, and conventional wisdom seems to be that such a company does not require an audit. However, the Companies House guidance seems to suggest otherwise, or at best is ambiguous:
3. Are all types of small companies eligible for the exemption?
No. Audited accounts must be delivered to Companies House if the company falls into any of the following categories:
(a) A parent company or subsidiary undertaking (unless dormant for the period during which it was a subsidiary) except where:
* the group qualifies as a small group or would qualify if all the bodies corporate in the group were companies; and
* the turnover for the whole group is not more than £5.6 million net or £6.72 million gross; and
* the group's combined balance sheet total is not more than £2.8 million net (£3.36 million gross).
This appears to imply that in the case of a subsidiary company, one must consider the size of the group: the worldwide group would not be within the limits. The accepted wisdom that no audit is required presumably implies that only the size of the UK group need to be considered, but I am having difficulty in finding authority for that.
Can anyone help?
- Which address 1,041 12
- Does anybody still use a Filofax? 569 20
- MS Surface Pro 3 80 1
- Financial statements in Word, with formulas 1,469 17
- HMRC Penalties - are they enforceable? 1,057 35
- Your fondest calculator memories 1,203 44
- R&D tax claim 248 7
- You think HMRC are inefficient? 526 9
- Company Pension Contributions 2013/14 182 7
- Profit accruing in fiduciary or representative capacity 131 2
- Gift to employee 375 12
- Tax Allowance on University Course 167 1
- Transfer of a business 127 1
- I hate HMRC's voice recognition system - The Inept Interrogator 1,141 22
- Investment property where tenant lives rent free 416 8
- VAT Cross Border Invoicing 120 2
- Sage Import Data 313 6
- Slight twist on employment related securities 245 1
- Child and Working Tax Credits and sudden increase in investment income - does this trigger a claw back? 137 2
- Best time software for small practice? 239 2
- DTR : TIOPA 2010 Section 42 483
- CTA study material 457
- Sect 102 TMA 1970 335
- Pre incorp expenses 315
- Relief on French Tax Deposit? 270
- Anyone have clients that use Pay4Later to offer customers credit? 257
- What is the tax position if I am working overseas but via a UK agency? 209
- Gift Aid after 5 April, before 31 Jan - Tax Credits 162
- Anybody have that old ACCA Student Training Record (STR1) 144
- Taxation of partners in an LLP following new rules 135