Lisa Lokasto

After years of discussion and engagement across the business, legal, and regulatory communities, a long-anticipated change to Ireland’s audit exemption regime has finally come into effect.

As of today, small and micro companies will no longer automatically lose their audit exemption for a first late filing of an B1 annual return to the CRO within a five year period.

This reform, introduced under Section 22 of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024, represents a much-needed step forward in recognising the realities faced by SMEs  and the disproportionate penalties they previously faced for a once off administrative slip.

What’s changing

Under the new regime:

• One late filing in five years = Audit exemption remains
• Repeated late filings = Audit exemption lost
• Late filing fees still apply

This is a significant change from the previous position, where even one late filing regardless of circumstances resulted in the automatic loss of audit exemption for two years, often with serious cost implications.  The only way to avoid losing audit exemption was to apply to the District Court for an extension under section 343 of the Companies Act 2014 which took ages and was costly.

This is a welcome and proportionate reform that eases an administrative burden on small businesses and their advisors.

Lisa