Preparing for UK company size Threshold Changes
From 6 April 2025, UK company size thresholds are increasing significantly, impacting how businesses are classified and the reporting requirements that apply.
With turnover and balance sheet limits rising by around 50%, many companies may now qualify as smaller entities, potentially reducing compliance and reporting obligations.
With turnover and balance sheet limits rising by around 50%, many companies may now qualify as smaller entities, potentially reducing compliance and reporting obligations.
What is changing?
Company size continues to be determined by meeting two out of three criteria (turnover, balance sheet total and employees).
Previous thresholds (pre-April 2025)
New thresholds (from April 2025)
Previous thresholds (pre-April 2025)
- Small: £10.2m turnover / £5.1m assets / 50 employees
- Medium: £36m turnover / £18m assets / 250 employees
New thresholds (from April 2025)
- Small: £15m turnover / £7.5m assets / 50 employees
- Medium: £54m turnover / £27m assets / 250 employees
Why does this matter?
These changes may allow businesses to move into a lower category, giving access to:
- Audit exemption (for newly qualifying small companies, subject to eligibility)
- Reduced disclosures and simplified accounts
- Removal of certain reporting requirements, such as the Strategic Report for small companies
Things to consider
While the reduction in compliance can be attractive, it is important to consider:
- Stakeholder requirements (e.g. lenders may still require audited accounts)
- Group implications, where size is assessed at group level
- Future growth plans, to avoid short-term decisions creating longer-term inefficiencies
- Whether to retain a voluntary audit for assurance
How Fiander ETL can help
At Fiander ETL, we help businesses take a practical, joined-up approach to these changes.
We can support you in:
We can support you in:
- Assessing your new company size classification
- Determining whether audit exemption is appropriate
- Selecting the right reporting framework
- Managing a smooth transition
