What businesses need to know about new reporting thresholds

The Government has announced changes to reporting requirements for businesses, raising the turnover and balance sheet thresholds that determine whether a company is classified as a micro-entity, small, medium-sized, or large.

These are the first updates since 2013 and are designed to reduce the compliance burden on businesses.

If you are running a company or limited liability partnership (LLP), these changes could affect your reporting obligations.

What’s changing?

From 6 April 2025, companies will benefit from higher thresholds for determining their size, with increases of approximately 50 per cent across turnover and balance sheet totals.

These changes apply to both companies and LLPs, meaning thousands of businesses will move into lighter reporting categories.

Here are the new thresholds for each entity:

• Micro-entities – Turnover up to £1 million, balance sheet total up to £500,000.
• Small companies – Turnover up to £15 million, balance sheet total up to £7.5 million.
• Medium-sized companies – Turnover up to £50 million, balance sheet total up to £25 million.
• Large companies – Companies exceeding two of the medium-sized thresholds.

These adjustments will ease the financial and non-financial reporting requirements for many businesses, saving time and resources.

Key benefits for businesses

• Reduced compliance costs – The Government estimates businesses will save around £240 million annually.
• Streamlined reporting – Micro-entities and small companies, in particular, will see a reduction in the amount of information they need to include in their accounts and directors’ reports.
• Simplified directors’ reports – Several overlapping and outdated requirements will be removed, aligning corporate reporting with the Government’s focus on clarity and relevance.

What does this mean for you?

For many businesses, these changes present an opportunity to reduce the administrative burden of annual reporting.

However, determining how the new thresholds affect your company isn’t always straightforward.

Things to consider:

• Will your company move to a lower category, and how will this affect your reporting obligations?
• How can you make the most of the transitional measures to compare prior years’ accounts on the same basis?
• Are there governance or stakeholder communication updates needed to reflect these changes?

The changes also affect the off-payroll working rules, with around 10,000 companies falling below the compliance threshold.

This could impact your relationships with contractors and the way you manage tax compliance.

With the new rules coming into force in April 2025, now is the time to review your company’s reporting obligations and prepare for the transition.

Contact us today to learn more about how we can support your business with expert company secretarial services.