Around 100,000 UK businesses are set to save millions of pounds in administration costs and accountancy fees under proposals announced by the government.
Business secretary Vince Cable has revealed plans to allow more companies to decide whether to have a statutory audit or not to try to reduce auditing and reporting requirements.
Furthermore, the majority of subsidiary companies will not have to complete a mandatory audit, as long as the parent firm guarantees its liabilities.
Dr Cable said that changes have been prompted by reporting requirements becoming "increasingly demanding and costly over the years.
"Tackling these problems will help save UK companies millions every year and free them up to expand and grow their business, which ultimately benefits the entire British economy."
It comes after the Chartered Institute of Taxation found that "larger" small firms are finding it difficult to meet their tax obligations because of the administrative burden they face.