Definition of Company Size: Monetary Thresholds to Rise

The UK government intends on making significant changes to simplify company reporting, particularly for non-financial reporting. To reduce complexity, monetary thresholds determining company reporting requirements are expected to increase by 50% for financial periods starting on or after October 1st, 2024.

A company is “micro-entity” if it has any 2 of the following:

Turnover:

• Not more that £1 million (currently £632,000)

Balance Sheet:

• Not more than £500,000 (currently £316,000)

Employees:

• Not more than 10

A company is “small” if it has any 2 of the following:

Turnover:

• Not more that £15 million (currently £10.2 million)

Balance Sheet:

• Not more than £7.5 million (currently £5.1 million)

Employees:

• Not more than 50

A company is “medium-sized” if it has any 2 of the following:

Turnover:

• Not more that £54 million (currently £36 million)

Balance Sheet:

• Not more than £27 million (currently £18 million)

Employees:

• Not more than 250

Potential changes for medium-sized companies:

Further consultations are planned for later in 2024 to:

∞    Increase the employee threshold for medium-sized companies (from 250 to 500)

∞    Possibly exempt medium-sized companies from strategic reports

The above changes will mean an estimated 132,000 businesses will be exempt from non-financial reporting requirements.

Other key points:

• Streamlined annual reports: The government plans to remove unnecessary content requirements for annual reports.
• Easier digital filing: Measures will be introduced to simplify digital reporting processes.

These changes aim to streamline reporting processes, saving businesses time and resources and aligns with the government's goal of easing the regulatory burden on UK businesses.