The government announced changes to the company size thresholds will come into effect on or after 6 April 2025.
The new regulations establish revised thresholds for company classification:
|
MICRO |
SMALL | MEDIUM | ||||
| Current | New | Current | New | Current |
New |
|
| Turnover
(not more than) |
£632k |
£1m | £10.2m | £15m | £36m |
£54m |
| Balance sheet
(gross assets) |
£316k |
£500k | £5.1m | £7.5m | £18m |
£27m |
| Average number of employees |
10 |
10 | 50 | 50 | 250 |
250 |
Companies need to meet 2 out of 3 criteria for 2 years running except in first period.
The increased thresholds will also apply to limited liability partnerships (LLPs) via amendments to their regulations.
Companies able to move down a size category will be entitled to the accompanying reduction in reporting and audit requirements for example micro companies will no longer require a Directors report, and for:
Small Companies – the removal of disclosures about disabled persons employment
Medium and Large Companies – the removal of several requirements including:
- Financial instruments and risk management
- Post-balance sheet events
- Future developments
- Research and development activities
- Overseas branches
- Employee and stakeholder engagement
- Impact on Audit Requirements
The audit exemption thresholds will increase in line with small company thresholds, potentially allowing more companies to qualify for audit exemption.
If you would like to discuss how this may impact your business, please get in touch.
