Relief for UK Businesses: Company Size Thresholds Increased from April 2025

published on 24 April 2025 | reading time approx. 2 minutes

From 6 April 2025, the UK government has increased the financial thresholds that define micro, small, and medium-sized companies – a welcome change for thousands of businesses aiming to simplify compliance and reduce reporting burdens. At Rödl & Partner Limited, we are already working with clients to assess the impact of these changes and help them take full advantage of the new rules.

What's Changing?

The thresholds for turnover, balance sheet total, and employee count are increasing. A company qualifies for a category if it meets any two out of three of the criteria:

Category	Turnover (≤)	Balance Sheet Total (≤)	Employees (≤)
Micro-Entity	£1 million	£500,000	10
Small Company	£15 million	£7.5 million	50
Medium Company	£54 million	£27 million	250

These new thresholds apply to financial years starting on or after 6 April 2025.

What This Means for Your Business

These changes are not just administrative – they offer real strategic advantages:

Audit exemption for newly reclassified small companies
Simplified financial statements for small and micro-entities
Exemption from preparing Strategic Reports
Reduced Directors' Report disclosures for medium and large companies

Estimates suggest:

113,000 companies may now fall under the micro-entity regime
14,000 companies could become small (and exempt from audit)
6,000 companies could benefit from medium-size exemptions

Transitional Relief Available

Companies can apply the new thresholds immediately for financial years starting on or after 6 April 2025, using prior-year figures, without waiting for two consecutive years of meeting the criteria.