Simpler reporting: company size thresholds are changing

The Government has announced plans to raise the monetary thresholds that determine company size: annual turnover and balance sheet total. Via legislation expected in Summer 2024, this will reduce reporting requirements for small and medium businesses when filing accounts.

The effect of the changes

Across the four company size regimes – micro, small, medium and large – the Government expects more than 130,000 companies to change their classification to the next regime down:

Change Number of companies that will be reclassified Benefits
Large to medium 5,000 More proportionate reporting
Medium to small 13,000 Exemptions to statutory audit requirements; ability to file simpler accounts
Small to micro 113,000 Filing simpler accounts

How the thresholds will change

To qualify for a specific regime, companies must meet at least two of three criteria, either in their first financial year or in two consecutive financial years. The three criteria are annual turnover, balance sheet total and average number of employees.

This is how the first two criteria are due to change:

Micro Small Medium Large
Old New Old New Old New Old New
Annual turnover

(not more than)

£632k £1m £10.2m £15m £36m £54m £36m+ £54m+
Balance sheet total

(not more than)

£316k £500k £5.1m £7.5m £18m £27m £18m+ £27m+

The current thresholds for average number of employees – none of which are expected to change before further consultation – are:

Micro Small Medium Large
Not more than 10 Not more than 50 Not more than 250 251 or more

Other changes to simplify company reporting

The Government has also announced plans to:

  • Remove various obsolete, low-value or overlapping requirements from the Directors’ Report, and from the Directors’ Remuneration Report and Policy
  • Make the issuing of digital annual reports simpler for businesses
  • Fix some technical issues in the audit regulatory framework

The Government’s next steps

Following the setting out of legislation this summer, the Government intends for companies to apply the new thresholds to financial years starting on or after 1 October 2024.

Later this year, the Government intends to consult on:

  • Increasing the medium companies’ employee threshold from not more than 250 to not more than 500
  • Exempting medium companies from having to produce a strategic report
  • exempting smaller public interest entities from audit tendering and rotation requirements.

How BKL can help

Beyond supporting your business’s reporting and compliance requirements, our specialist advisers are here to help you plan for future opportunities and growth.

If you’d like to have a chat about how the new company size thresholds will affect you and your business ambitions, please get in touch with your usual BKL contact or use our enquiry form.



Sam Inkersole

In 2022, Sam won the Taxation’s Rising Star award at the Taxation Awards in and was named in the Accountancy Age 35 Under 35.

Jon Wedge

While Jon’s client work focuses on the financial services sector, he also oversees the firm’s assurance service, as well as supporting the trainees following in his footsteps.


Elana joined us in 2017 as an ACA trainee, after graduating from Durham University where she had studied languages. She is now a manager in our assurance team.


By submitting this form, the data provided will be used to perform your request according to our privacy policy.