Government proposes large rise in audit threshold for co-operatives

The move could save ‘a couple of hundred’ co-operatives thousands of pounds a year, it is estimated

The government is proposing a large increase in the income threshold above which co-operatives and community benefit societies must produce a full audit report.

A consultation from the Treasury proposes increasing the annual income threshold at which a full audit is required from £5.6m to £10.2m and the asset threshold from £2.8m to £5.1m.

The proposals would apply to co-operatives, community benefit societies and mutually-owned businesses run by their members in England, Wales and Scotland.

The umbrella body Co-operatives UK said the proposal would free “a couple of hundred” co-operatives from audit requirements, which can cost between £5,000 and £10,000 a year to complete.

The government said the proposals, which are intended to help co-operatives and community benefit societies compete on a level playing field with companies, would mean that more than 70 per cent of the 7,000 co-operatives in the UK would no longer have to carry out a full audit.

Ed Mayo, secretary general of Co-operatives UK, said: “We are pleased government has heeded calls to remove this unnecessary extra burden on co-operative and community businesses.

“This is a great example of the practical steps government can take to support the UK’s co-operative sector, which plays a key role in fostering a more inclusive economy.”

Stephen Barclay, the economic secretary to the Treasury, said: “From the dairy farm that provides milk to the local community, to the brewery owned by 10 friends who all have a passion for ale, we want to see co-operatives and community benefit societies across the UK thrive and grow.

“That’s why we’re reducing onerous administrative burdens on these societies, saving them money and freeing them up to concentrate on what matters the most – the needs of their members and communities.”

The consultation closes on 22 September. 

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Amount paid in audit fees by top 5,000 charities rises by more than £2m

A new report from the data firm Charity Financials also shows Crowe Clark Whitehill earned the most in fees in the past year

The overall amount paid out in audit fees by the top 5,000 charities has increased by 4.4 per cent, according to a new report.

The data provider Charity Financials’ Charity Audit Spotlight for 2017, which is based on scrutiny of the latest accounts for the 5,000 largest UK charities, shows that audit fees cost them a total of £69.4m.

In comparison, last year’s Charity Audit Spotlight showed that the UK’s largest charities paid more than £67m in audit fees, which was itself a 2.5 per cent increase on the previous year. 

The report found that the audit firm Crowe Clark Whitehill has the largest market share, earning £5.7m in fees and accounting for 8.2 per cent of the market.

PricewaterhouseCoopers earned more than £4.6m in fees from charities and BDO earned almost £4.5m, the report says.

But rival audit firm haysmacintyre had the most charity clients in the top 5,000 with 263, followed by CCW with 240 and RSM with 236.

Haysmacintyre also gained the most new clients for the second year running, the report shows, with 30 charities appointing the firm and paying fees worth a combined £449,000.

The report says that while 328 charities changed auditor in their latest set of accounts, 27 per cent of the top 5,000 charities have not changed their auditor in the past decade.

The largest charity to change auditor was the Wellcome Trust – which is the UK’s richest charity – which paid Deloitte £300,000 to audit its latest set of accounts, the report says.

PwC audits the largest amount of charity income, the report shows, with £5.65bn scrutinised by the firm this year.

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