25th July 2025
Section 22 Brings Welcome Reform to Audit Exemption Rules for Irish SMEs
Big news for small businesses: a major change in Irish company law has officially come into effect. As of 16 July 2025, Section 22 of the Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 is now live — introducing a more balanced and supportive approach to audit exemption rules.
This legislative update is particularly significant for small and micro companies, which often operate with limited administrative resources. Previously, if a company missed its annual return deadline — even just once — it automatically lost its audit exemption for the next two years. This rigid penalty system resulted in increased costs and compliance burdens for many otherwise compliant businesses.
Under the new regime, introduced by Section 22:
- A one-time late filing within a five-year period will no longer trigger a loss of audit exemption.
- Companies will still incur late filing fees, but they won’t be forced into a full audit unless there are multiple late filings.
- The five-year monitoring window starts from 15 July 2025.
This change recognises the realities of running a small business and aims to reduce unnecessary penalties. Companies that make a single, isolated filing error will no longer face a disproportionate administrative and financial impact. Instead, the system now focuses on patterns of non-compliance, rather than penalising one-off mistakes.
At Right Solution Centre Ltd, we welcome this long-overdue reform. It provides much-needed breathing space for small business owners and reflects a fairer balance between enforcement and practicality. We remain committed to helping our clients stay compliant and avoid late filings — but this adjustment ensures that a single slip-up doesn’t carry excessive consequences.
If you’re uncertain how the updated audit exemption rules may apply to your company, our expert team is ready to assist. Contact us here.
