The entitlement to a particular company size regime is determined by reference to criteria set out in CA 2006. Qualitative factors are used to establish whether a company is excluded from a regime because of its nature. For example, public companies and certain financial services companies cannot qualify as micro-entities, small, or medium-sized companies. There are also restrictions in certain group situations, for example, when a company is part of an ‘ineligible group’.
A company will additionally need to assess whether it qualifies for a regime by meeting the relevant size thresholds for turnover, balance sheet total (meaning the total of the fixed and current assets) and the average number of employees. The company size limits are met for a financial year if any two of the following three thresholds are met:
| Micro |
Small |
Medium |
|
|---|---|---|---|
| Turnover not more than |
£632,000 |
£10.2 million |
£36.0 million |
| Balance sheet total not more than |
£316,000 |
£5.1 million |
£18.0 million |
| Monthly average number of employees not more than |
10 | 50 | 250 |
Upcoming changes to company size thresholds
From 6 April 2025, legislation will come into effect to increase company turnover and net assets thresholds by approximately 50%. This uplift in thresholds accounts for inflation since the previous thresholds were set and is also part of the government’s drive for more proportionate reporting. Companies able to move down a size category will be entitled to the accompanying reduction in reporting requirements.
Find out more about the context for these amendments in the following By All Accounts article (published in April 2024):
Small companies and micro-entities
There are special provisions available in CA 2006 for small companies and micro-entities when preparing and filing their annual accounts and reports. For more information on the criteria visit:
For more information about the requirements and simplifications available to small companies and micro-entities, including some practical considerations to help you choose the right financial reporting regime according to your circumstances visit:
Medium-sized companies
There are also some special provisions available to medium-sized companies when preparing their annual accounts and reports, for example, with regards to the information required in the strategic report and the directors’ report.
For more information on the criteria for medium-sized companies visit:
Large companies
Any companies that do not meet the criteria to be a micro-entity, or a small or medium-sized company, are large companies and are required to prepare and file full accounts.
Further ICAEW resources
For detailed guidance on the criteria for each size regime of company in the Companies Act 2006, ICAEW members and Corporate Reporting Faculty subscribers can visit:
