UK and International Tax news
Corporate Reporting and Changes To Company Size Thresholds
Sunday 13th April 2025
New regulations which increase company size thresholds and remove certain requirements from the directors’ report have become effective from 6 April 2025.
The government has published new legislation in The Companies (Accounts and Reports) (Amendments and Transition Provision) Regulations 2024, which increases the monetary size thresholds that determine whether a company is entitled to the reporting regimes for micro, small and medium-sized entities.
For accounting periods commencing on or after 6 April 2025, the new size thresholds are shown below. As before, the company size limits are met if any two of the three thresholds are met.
| MICRO | SMALL | MEDIUM | ||||
| Current | New | Current | New | Current | New | |
| Turnover not more than: | £632k | £1.0m | £10.2m | £15m | £36m | £54m |
| Balance sheet [total assets] not more than: |
£316k | £500k | £5.1m | £7.5m | £18m | £27m |
| Ave monthly no of employees, not more than: |
10 | 10 | 50 | 50 | 250 | 250 |
There is a two-year rule which applies when determining a company’s size for corporate reporting purposes. A company qualifies as micro, small or medium-sized once it has the met the size limits in its first ever financial year or otherwise in any two consecutive financial years. Thereafter, the company remains qualified for that regime until it fails to meet the size limits for any two consecutive financial years.
The new legislation includes a transitional provision for the application of the two-year rule. For a financial year beginning on or after 6 April 2025, the transitional provision allows preparers to assume that the new thresholds had been applicable in the previous financial year. As a result, companies can benefit from the threshold uplift as soon as possible after the legislation comes into effect.
If you would like more information on the above changes, please contact Keith Rushen on 0207 486 2378.
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