If you run a UK business, this is something you really need to know. From 6 April 2025, the size thresholds that define whether your company is micro, small, medium, or large are going up — by around 50%!
These thresholds determine your reporting obligations, including whether you need to submit detailed accounts or even have an audit. With the new rules, thousands of companies could benefit from simpler, cheaper reporting requirements.
In October 2024, the UK government confirmed plans to raise the monetary thresholds used to classify company size. This was followed by official legislation in December 2024.
It’s the first major update in years — and it's not just an inflationary tweak. The government wants to future-proof UK corporate reporting and keep the country competitive for business.
To qualify for a size category, a company must meet at least two out of three criteria:
⚠️ Non-monetary factors (like group structure or public interest status) can still affect your classification — so check carefully.
Under the Companies Act 2006, company size affects how much reporting you need to do. In general:
Smaller = less reporting
Larger = more compliance
With the new thresholds, many companies will “move down” a category and gain access to a lighter reporting regime.
Here’s what might shift:
✅ 113,000 companies could move from small to micro
✅ 14,000 companies might shift from medium to small — losing the audit requirement
✅ 6,000 companies could go from large to medium
Minimal disclosures
No cash flow statement or audit usually needed
⚠️ Limited information can affect credit ratings and investor confidence
Can omit cash flow statements (for now)
Usually exempt from audit
⚠️ From 2026, more disclosures required under FRC changes
Fewer disclosures than large firms
Exempt from energy and carbon reporting
May benefit from cost savings — but weigh these against your future growth needs
While lighter reporting sounds great, it’s not always the right move:
You might outgrow the lower regime quickly
Switching back can disrupt internal systems
Micro accounts (FRS 105) can be too limited for lenders and investors
Small and micro businesses will be required to submit their profit and loss accounts to Companies House.
These changes are a big step toward modernising UK corporate reporting and reducing red tape. But don’t jump too fast — take time to consider what regime is right for your business now and in the future.
Need help figuring out what this means for your company? Talk to your accountant or advisor soon — the clock is ticking!