On July 16th, 2025, Minister Peter Burke announced a significant change to the audit exemption rules for small and micro companies in Ireland. Going forward, small businesses won't automatically lose their audit exemption after a single late filing of their annual return, if it's the first such lapse in a five-year period.

Previously, even one late return meant losing the audit exemption and having to produce two years of audited financial statements, so this change comes as a relief for many small business owners who had faced steep costs and administrative burdens after missing a filing deadline. 
 

What’s changing?

A company will now only lose its audit exemption if it has failed to file on time more than once in a five-year period. First-time late filers within that window will still face late filing fees, but they won’t lose their audit exemption. 

Please note that any company that has filed late prior to the 15th of July 2025, an audit for two consecutive years will still be required. The new rules on audit exemption apply to any filings filed late after 15th July 2025.

Upsides:

• Lower costs: Small companies that miss a filing deadline once in a while won’t be forced into audit, which can save money.
• Less hassle: The change cuts down on paperwork and makes life a bit easier for small business owners who are already juggling a lot.
• More understanding: It acknowledges that mistakes happen and gives companies a bit of breathing room without immediately hitting them with heavy penalties.

Downsides:

• Late fees still apply: Even with the new rule, companies will still have to pay a fee if they miss the deadline.
• No second chances: If a company files late again within five years, it will lose the audit exemption.
• Not applicable to annual returns filed before 15 July 2025: If a company has filed late prior to 15th July 2025 an audit for two consecutive years is still required

Minister Burke called the update a fair and practical step that supports small businesses while still encouraging them to stay on top of their filing duties. Minister Niamh Smyth also stressed the importance of timely returns, pointing out that accurate company records are essential for many stakeholders.

This change is part of a broader push to simplify company law and ease the load on Ireland’s small business community.