New UK company size thresholds for 2025/26

Here we set out the new thresholds and the required criteria

On 6 April 2025 new UK company size regulations come into effect.

These changes follow ‘The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024’ that were laid before Parliament in December 2024.

This table sets out the new and existing thresholds that will apply for a financial year if any two of the three criteria are met.

New thresholds

If a company or LLP meets any two out of the three criteria in a financial year they can apply the resultant reduction in reporting requirements.

Remember that there are certain types of companies not allowed to take advantage of this regime as set out in s.384 (companies excluded from the small companies regime), s.384B and s.467 (companies excluded from being treated as medium-sized) of the Companies Act 2006.

Companies and LLPs moving into the small entities regime will have simpler accounting requirements, will no longer need to produce a Strategic report and will be exempt from audit (subject to their governing document and any group membership implications). This audit exemption will be of huge benefit to small non-charitable companies and small LLPs.

Those moving from large to medium sized will have a simpler Strategic report removing the requirement to include a statement on how directors have had regard to stakeholder and other interests listed in section 172, CA 2006 (Section 172(1) statement).

Transitional provision removing two-year consecutive rule

A transitional provision in the legislation means that if the size criteria apply in the current financial year then they are also deemed to have applied in the previous financial year.

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