Significant changes are coming to UK company reporting requirements following the publication of The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024. These changes, effective for financial years beginning on or after 6 April 2025, bring important updates to company size thresholds and reporting obligations.
Key Changes to Size Thresholds
The new regulations establish revised thresholds for company classification:
Company and Group Size Thresholds (Net)
Companies must meet two out of three criteria:
Micro Companies:
- Turnover: Under £1m
- Balance Sheet Total: Under £500k
- Employees: Fewer than 10
Small Companies:
- Turnover: Under £15m
- Balance Sheet Total: Under £7.5m
- Employees: Fewer than 50
Medium Companies:
- Turnover: Under £54m
- Balance Sheet Total: Under £27m
- Employees: Fewer than 250
Large Companies exceed medium-sized thresholds.
Group Size Thresholds (Gross)
Different criteria apply for group classifications, with small groups starting at £18m turnover and £9m balance sheet total.
Changes to Directors’ Report Requirements
The regulations also simplify reporting requirements:
- Small Companies: Remove requirements for disclosures about disabled persons employment
- Medium and Large Companies: Eliminate several disclosure requirements, including:
- Financial instruments and risk management
- Post-balance sheet events
- Future developments
- Research and development activities
- Overseas branches
- Employee and stakeholder engagement
Impact on Audit Requirements
The audit exemption thresholds will increase in line with small company thresholds, potentially allowing more companies to qualify for audit exemption. This change applies to financial periods beginning on or after 6 April 2025.
Transitional Provisions
Companies can apply these amendments retrospectively when determining their size classification, effectively bypassing the usual two-year consecutive rule. This allows eligible companies to benefit from the new thresholds immediately upon implementation.
Future Considerations
While these changes generally simplify reporting requirements, companies should note:
- The impact of new lease accounting treatments under FRS 102.
- Mandatory implementation of periodic review amendments from January 2026.
- Potential future changes through the Future of Corporate Reporting consultation expected in 2025.
These regulatory updates aim to reduce administrative burden while maintaining appropriate oversight of company reporting. Companies should consult with their advisors to understand how these changes affect their specific reporting obligations.
Further Information
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