Audit exemption and small companies regime statement wording
An audit-exempt company's balance sheet must state, above the director's signature, which exemption it used, that the members have not required an audit under section 476, and that the directors acknowledge their responsibilities for the accounting records and the accounts. Small companies and micro-entities add their regime statement. The wording Companies House uses is below.
Key facts
| Where | On the balance sheet, above the signature (Companies Act 2006, s475(4)) |
|---|---|
| Prescribed wording | None: the Act requires statements to the effect of its words; Companies House's wording is the usual form |
| Small company exemption | Section 477 |
| Subsidiary exemption | Section 479A, with a parent guarantee |
| Dormant company exemption | Section 480 |
| Members' right | Holders of at least 10% can require an audit (Companies Act 2006, s476) |
| From April 2028 | A strengthened statement is planned; its wording is not yet published |
As at 25 October 2026.
The statements, word for word
| Statement | Wording (Companies House) |
|---|---|
| Small company audit exemption | For the year ending 31 December 2026 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies. |
| Subsidiary audit exemption | For the year ending 31 December 2026 the company was entitled to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies. |
| Dormant company audit exemption | For the year ending 31 December 2026 the company was entitled to exemption from audit under section 480 of the Companies Act 2006 relating to dormant companies. |
| Members have not required an audit | The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476. |
| Directors' responsibilities | The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts. |
| Small companies regime | These accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies regime. |
| Micro-entity | The accounts have been prepared in accordance with the micro-entity provisions and have been delivered in accordance with the provisions applicable to companies subject to the small companies regime. |
| Abridged accounts | The members have agreed to the preparation of abridged accounts for this accounting period in accordance with section 444(2A). |
| Filleted accounts (statutory text of s444(5)) | The company's annual accounts and reports have been delivered in accordance with the provisions applicable to companies subject to the small companies regime. |
| Dormant | To the effect that the company was dormant throughout the accounting period |
Replace the date with the company's year end. The audit exemption statement names one exemption; the members' and directors' statements follow it in every case.
How they appear on a small company's balance sheet
- For the year ending 31 December 2026 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
- The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476.
- The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.
- These accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
- Approved by the board of directors and authorised for issue on [date] and signed on its behalf by: [signature], [printed name of the director], Director.
For a micro-entity, the micro-entity statement replaces the small companies regime statement. For a company filing without its profit and loss account, see the extra statements in the filleted accounts example.
Which exemption applies
| Exemption | Conditions | Not available to |
|---|---|---|
| Small companies, s477 | The company qualifies as small on its own figures; a company in a group only if the whole group qualifies as small and is not ineligible | Public companies; banking, insurance, e-money, investment and UCITS companies; Master Trust funders; special register bodies and employers' associations (s478) |
| Subsidiaries, s479A | UK parent; all members agree; the parent guarantees the subsidiary's liabilities at the year end; the subsidiary is included in the parent's consolidated accounts, which disclose the exemption; the documents are delivered by the filing date | Traded companies; banking, insurance, e-money, investment and UCITS companies; insurance market activity; Master Trust funders; special register bodies and employers' associations (s479B) |
| Dormant companies, s480 | Dormant since formation, or since the previous year end while entitled to the small companies regime and not required to prepare group accounts | Traded companies; banking, insurance, e-money, investment and UCITS companies (s481) |
Medium-sized and large companies can be exempt only as subsidiaries or as dormant companies. In every case members holding at least 10% of the nominal value of the shares (or 10% of the members, without share capital) can require an audit, by notice given in the year and no later than one month before it ends.
The planned change from April 2028
The Economic Crime and Corporate Transparency Act 2023 replaces the audit exemption statement with one that identifies the exemption and confirms that the company qualifies for it. It has not come into force; Companies House has announced it from April 2028, and as at 25 October 2026 no new wording had been published. Until it applies, use the wording above.
Frequently asked questions
Is there an official wording for the audit exemption statement?
The Act requires statements to the effect of its words rather than exact wording. The wording Companies House publishes is the one most accounts use.
Where do the audit exemption statements go?
On the balance sheet, above the signature of the director who signs on behalf of the board, as section 475(4) of the Companies Act 2006 requires.
Can a subsidiary be exempt from audit?
Yes, under section 479A, if its UK parent guarantees its liabilities, all the members agree and the parent's consolidated accounts include it. Otherwise a subsidiary is exempt only if its whole group is small.
What is the small companies regime statement?
A statement above the signature that the accounts have been prepared under the provisions for companies subject to the small companies regime, required on a small company's balance sheet.
Sources
- Companies Act 2006, section 414
- Companies Act 2006, section 444
- Companies Act 2006, section 475
- Companies Act 2006, section 476
- Companies Act 2006, section 477
- Companies Act 2006, section 478
- Companies Act 2006, section 479
- Companies Act 2006, section 479A
- Companies Act 2006, section 480
- Companies Act 2006, section 481
- Companies House: preparing and filing Companies House accounts
- Companies House: ECCTA outline transition plan
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