UK company size thresholds for statutory Audits are changing. Is your business ready?
Audit Director Brian Thomson summarises the new regulations increasing UK company size thresholds for statutory audits, effective from 6 April 2025.
How are the rules on UK company size thresholds for statutory audits changing?
The UK Government has published new legislation relating to the UK company size thresholds for statutory audits and the removal of certain requirements from the Directors’ report. The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 have changed the monetary thresholds for micro, small and medium-sized businesses.
The increase in thresholds is due to the Government’s desire to reduce the reporting complexity and the administrative burden on companies. The changes also consider the effect of inflation since the last update in 2013.
What are the new UK company size thresholds for statutory Audits?
Effective from 6 April 2025, the new UK company size thresholds for statutory audits will be met for the financial year 2025/26 if any two of the following criteria are met:
| Criteria | Micro | Small | Medium |
| Turnover not greater than | £1m | £15m | £54m |
| Balance sheet total assets not greater than | £500,000 | £7.5m | £27m |
| Monthly average number of employees not greater than | 10 | 50 | 250 |
How do I determine my company size for financial year 2025/26?
The legislation allows businesses to determine their company size based on a previous financial year to expedite the introduction of the new thresholds. This will also allow businesses to benefit from the new audit thresholds promptly after the legislation comes into effect.
Review the full Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024.
Expert advice for UK company size thresholds for statutory Audits
The changing thresholds will have different implications for affected businesses and tailored advice should be sought in all cases. If your business is likely to be impacted by the legislation, please contact Brian Thomson for a confidential discussion.
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