As of April 2025, the audit threshold for UK businesses will change meaning companies meeting 2 out of the following three thresholds of turnover that exceeds £15 million, a balance sheet over £7.5m and 50 or more employees will need to undergo statutory audits. For those businesses that are approaching this threshold, these should not be seen as just a compliance measure but a strategic tool that can help to unlock new opportunities and reinforce trust among stakeholders.
At The MGroup, we specialise in audit and assurance services, helping businesses across the UK and internationally to use these obligations to their advantage. In this article, we will explore how to prepare for this milestone and understand the benefits an audit can bring.
Understanding the New Thresholds
The upcoming increase in these thresholds marks a significant shift in financial compliance requirements. From April 2025, the new thresholds will apply and many businesses will no longer be legally required to conduct audits. However this doesn’t mean that audits lose their value or importance.
Why Businesses Should Maintain Audits
Even if your turnover falls below the new £15 or £7.5m million threshold, audits remain a vital tool for growth, stability, and credibility. Large businesses often operate in complex financial environments where regular audits can:
- Enhance Financial Oversight: Comprehensive audits ensure that financial processes remain robust, reducing risks as your business scales.
- Support Future Growth: Whether pursuing acquisitions, attracting investors, or planning for an IPO, audited accounts provide transparency and confidence to stakeholders.
- Align with Market Expectations: Many industry partners, banks and regulators expect a high level of financial accountability, regardless of legal requirements.
Turning Audits into a Strategic Advantage
Audits are more than a compliance exercise, they can create strategic opportunities that provide deeper insights into your business’s financial health and operations.
- Enhanced Decision-Making: Regular audits can provide you with accurate and detailed financial data to identify strengths and weaknesses within your business. This data then can be used to make informed decisions for sustainable growth.
- Building Trust with Stakeholders: Banks, investors and potential buyers often view audited financial statements as a mark of credibility. This can help to facilitate better financing terms, streamline operations, reduce costs and improve compliance processes.
- Strengthen the control environment and improve efficiency: Audits can often reveal inefficiencies in processes and gaps in internal controls.These findings can help your business streamline operations, reduce costs and improve compliance processes.
- Sustainability Reporting and ESG Compliance: Businesses are under increasing pressure to demonstrate their environmental, social, and governance (ESG) credentials. Audits can play a critical role in validating sustainability reporting and ensuring compliance with ESG standards.
- Future-Proofing Growth: As businesses grow, complexity often follows. Regular audits provide a structured approach to managing this complexity, ensuring your organisation is well-prepared for future challenges and opportunities.
In a competitive market, leveraging audits strategically can provide an edge over peers who may have opted to forgo them.
Preparing for the April Threshold: Steps to Take Now
While April may feel a while away, being proactive now can ensure that your business maximises the value of audits and adapts seamlessly to the new regulations. Here are some steps you can take to help you get started:
- Streamline Record and Processes: Make sure your financial records are accurate, well-organised and easily accessible. This can reduce audit timelines and costs.
- Strengthen Internal Controls: Investing in robust internal controls can minimise errors and mitigate risks. This step makes audits smoother and strengthens day-to-day operations.
- Collaborate with Auditors: Having a strong relationship with your audit team ensures they understand your business and its needs. Clear communication and collaboration can lead to targeted insights and recommendations.
- Consider Voluntary Audits: Conducting voluntary audits demonstrates a commitment to transparency and can future-proof your business. This approach can also prepare you for larger milestones like acquisitions, fundraising or IPOs.
Conclusion
Navigating the evolving audit landscape requires a partner who understands your business and its goals. At The MGroup, we offer tailored, partner-led audit and assurance services designed to deliver more than compliance. Our expert team of specialist audit staff provides actionable insights that drive efficiency, reduce risk, and support your business.
Whether your turnover is £5 million or £100 million, audits can be a powerful tool for growth and resilience. Our tailored services ensure you stay ahead of compliance while unlocking opportunities for long-term success
Want to learn more and hear about our audit approach? Contact us today, connect with Tim and Chris on LinkedIn.
