COMPANIES Citation, application and interpretation 1 1 These Regulations may be cited as the Companies Act 1985 (Audit Exemption) (Amendment) Regulations 1997 and shall come into force on 15th April 1997. 2 These Regulations apply to the annual accounts of any company for any financial year ending two months or more after the coming into force of the Regulations. 3 In these Regulations, “the 1985 Act ” means the Companies Act 1985. Amendment of section 249A 2 1 Section 249A of the 1985 Act (exemptions from audit for certain categories of small company) is amended as follows. 2 In subsection (2), for the words “a company”, substitute the words “a company which is a charity and”. 3 In subsection (3)(b) for “£90,000” substitute “£350,000”. 4 Insert the following subsection after subsection (3)— 3A In relation to any company which is a charity, subsection (3)(b) shall have effect with the substitution— a for the reference to turnover of a reference to gross income, and b for the reference to £350,000 of a reference to £90,000. 5 In subsection (4)— a for the words “a company” substitute the words “a company which is a charity”, and b in paragraph (b)— i for the word “turnover” substitute the words “gross income”, and ii for “£350,000” substitute “£250,000”. 6 Subsection (5) is hereby repealed. 7 Insert the following subsection after subsection (6)— 6A A company is entitled to the exemption conferred by subsection (1) or (2) notwithstanding that it falls within paragraph (a) or (b) of section 250(1). 8 Section 249A shall be deemed, since the commencement of that section, to have had effect as amended by paragraph (7). Amendment of section 249B 3 1 Section 249B of the 1985 Act (cases where exemption from audit not available) is amended as follows. 2 In subsection (1), for “subsection (1A)” substitute “subsections (1A) to (1C)”. 3 Insert the following subsections after subsection (1A)— 1B A company which, apart from this subsection, would fall within subsection (1)(f) by virtue of its being a parent company or a subsidiary undertaking for any period within a financial year, shall not be treated as so falling if throughout that period it was a member of a group meeting the conditions set out in subsection (1C). 1C The conditions referred to in subsection (1B) are— a that the group qualifies as a small group, in relation to the financial year within which the period falls, for the purposes of section 249 and is not, and was not at any time within that year, an ineligible group within the meaning of section 248(2), b that the group’s aggregate turnover in that year (calculated in accordance with section 249) is not more than £350,000 net (or £420,000 gross), and c that the group’s aggregate balance sheet total for that year (calculated in accordance with section 249) is not more than £1.4 million net (or £1.68 million gross). Amendment of section 249D 4 1 Section 249D of the 1985 Act (definition of reporting accountant) is amended as follows. 2 In paragraph (d) of subsection (3), for “the Chartered Association of Certified Accountants” substitute “the Association of Chartered Certified Accountants”. John M Taylor Parliamentary Under-Secretary of of State for Corporate and Consumer Affairs, Department of Trade and Industry 18th March 1997