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The UK government has announced an increase in company size thresholds for reporting and compliance purposes, effective from April 2025. This change will impact how businesses determine their size category and corresponding obligations. If you’re a small business owner, especially one searching for a small business accountant, understanding these updates is crucial for staying compliant.
What Are the Current and New Company Size Thresholds?
Currently, UK businesses are classified based on three size categories: small, medium, and large. These classifications are determined by three criteria:
Turnover: Annual revenue of the business
Balance Sheet Total: Total value of assets minus liabilities
Number of Employees: Staff employed during the year
Below is a comparison of the current and new thresholds, effective from April 2025:
Business Size | Criteria | Current Threshold | New Threshold (April 2025) |
Small Business | Turnover | £10.2 million or less | £13 million or less |
Balance Sheet Total | £5.1 million or less | £6.5 million or less | |
Employees | 50 or fewer | 60 or fewer | |
Medium Business | Turnover | £36 million or less | £50 million or less |
Balance Sheet Total | £18 million or less | £25 million or less | |
Employees | 250 or fewer | 300 or fewer |
Why Do These Changes Matter?
The new thresholds will have several implications:
Regulatory Relief: More businesses will qualify as small, reducing their reporting and compliance burdens.
Tax Implications: Reclassification may affect eligibility for tax reliefs and exemptions.
Audit Exemptions: Companies classified as small may no longer require statutory audits.
How Can a Small Business Accountant Help?
Understanding how these changes affect your business can be complex. Partnering with a small business accountant ensures you remain compliant and take advantage of any benefits. Here’s how an accountant can assist:
Assess Your Business Size: Determine whether your business will reclassify under the new thresholds.
Update Financial Plans: Adjust your strategies based on changes to compliance requirements.
Ensure Tax Compliance: Stay on top of HMRC regulations and potential tax savings.
For small businesses in the capital, a small business accountant in London offers localised expertise, helping you manage your finances in one of the world’s most competitive markets.
Why Choose Foundry Accounting?
If you’re searching for an “accountant near me,” Foundry Accounting is here to help. We specialise in supporting small businesses across London and the UK. Here’s what we offer:
Expert Guidance: Our team stays updated on the latest regulatory changes.
Personalised Services: Tailored solutions for small businesses of all sizes.
Local Expertise: As a small business accountant in London, we understand the unique challenges and opportunities of the local market.
Get Ready for April 2025
The increase in company size thresholds is a significant change for UK businesses. Staying informed and proactive is essential to ensure your business remains compliant and benefits from the new regulations. Whether you need advice on reclassification or help with day-to-day financial management, a trusted small business accountant can make all the difference.
Contact Foundry Accounting today to discuss how these changes impact your business and how we can support you in navigating them.
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