Co-operatives could save up to £10,000 a year thanks to new Government proposals requiring fewer of them to appoint an auditor.
The Government is consulting on proposals to increase the thresholds at which co-operatives have to produce a full audit report. Co-operatives include mutually-owned businesses that are run by and for their members and community benefit societies operated for the benefit of the community.
Currently, co-operatives with a turnover of less than £5.6 million and assets of less than £2.8 million can choose not to appoint an auditor. The Government is now proposing to increase the turnover and asset thresholds to £10.2 million and £5.1 million respectively.
This will mean that over 70% of co-operatives in the UK will no longer have to undertake a full audit, levelling the playing field between co-operatives and companies of the same size.
Stephen Barclay, economic secretary to the Treasury, said: "From the dairy farm that provides milk to the local community, to the brewery owned by ten 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."
Ed Mayo, secretary general of Co-operatives UK, welcomed the move. "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."
In order to take advantage of this change, co-operatives must have passed a resolution to dis-apply the requirement to produce a full audit report through their members, and the society must not be on the list of exempted societies, such as credit unions.
There are 7,000 co-operatives in the UK, jointly owned by over 17.5 million people and contributing more than £34.1 billion to the British economy. The largest co-operative is the Co-operative group - the UK's fifth biggest food retailer. Other examples include football clubs, dairy farms, social care providers and renewable energy providers.
Over the past three years, the Government has modernised the laws governing co-operatives and community benefit societies, making it easier for them to raise capital by increasing the limit of withdrawable share capital that an individual can invest from £20,000 to £100,000.