A small company is one that meets at least two of turnover up to £15 million, a balance sheet total up to £7.5 million and no more than 50 employees. Small companies can use the small companies regime, including simpler accounts and exemption from audit.
The thresholds
For financial years beginning on or after 6 April 2025, a company is small if it meets at least two of these:
| Test | Limit |
|---|---|
| Turnover | £15 million or less |
| Balance sheet total | £7.5 million or less |
| Average employees | 50 or fewer |
A company normally has to meet the tests in two consecutive years to move into or out of a size category. Public companies and companies in some regulated sectors cannot use the small companies regime.
What it means for the accounts
Small companies usually prepare accounts under FRS 102 Section 1A, can claim exemption from audit, do not need a strategic report, and can currently file filleted accounts — the balance sheet and notes only — with Companies House. From 1 April 2028 they will have to deliver the profit and loss account too.
Read more: FRS 105 vs FRS 102 Section 1A and Audit exemption.