In the government’s latest drive to promote economic growth, there is an ongoing focus on easing the regulatory burden for companies, especially when it comes to non-financial reporting.
Most recently, the government has confirmed several increases to monetary company size thresholds from October 2024. This will be the first update to these specific thresholds since they were introduced in 2016.
What are the changes?
Set to be effective for all accounting periods beginning on or after 1 October 2024, the changes will apply to turnover and net asset thresholds, for micro-entity; small; medium-sized; and large companies.
The confirmed monetary company size thresholds are as follows:
| Size regime | Current turnover threshold (£) | New turnover threshold (£) | Current net asset threshold (£) | New net asset threshold (£) |
| Micro-entity (≤ 10 employees) | ≤ 632,000 | ≤ 1m | ≤ 316,000 | ≤ 500,000 |
| Small (≤ 50 employees) | ≤ 10.2m | ≤ 15m | ≤ 10.2m | ≤ 7.5m |
| Medium (≤ 250 employees) | ≤ 36m | ≤ 54m | ≤ 18m | ≤ 27m |
| Large (> 250 employees) | > 36m | > 54m | > 36m | > 27m |
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What does this mean for companies?
It’s inevitable that these changes will cause many companies to re-categorise as a smaller company than before, therefore alleviating some reporting obligations. Should a company fall under a new threshold for turnover or net assets, then it’s important to remember that they must meet two of the three criteria (turnover, net assets, and average number of employees) for that size category. If this does not happen in a company’s first financial year, then it must meet these thresholds for two consecutive years before it is classified as that size.
Other proposed changes
On 16th May 2024, the Department for Business & Trade published a consultation document, ‘Non-financial reporting review: simpler corporate reporting’. This included a proposed increase to the threshold for average number of employees at which a company would qualify as medium-sized, from 250 to 500.
The government is calling on anyone with interest in this area to respond to the consultation by 27 June 2024. If you would like to learn more, then the full consultation document can be found here.
As your company grows and legislation continues to change, it’s vital that you stay in the know and remain compliant. Whether your company qualifies as small, medium or large, our Audit Team is on hand to help you navigate your obligations and make sure that you stay at the forefront of regulatory compliance.
For further guidance, please don’t hesitate to get in touch with a member of our team at Fiander Tovell!