The thresholds defining company sizes at Companies House haven’t been updated since 2016, but they have now been revised, with new thresholds coming into effect on 6th April 2025.
Companies House also plans to roll out new requirements for directors and people with significant control (PSCs) to verify their identities, which should be introduced by late 2025.
The static thresholds and a couple of years of high inflation have made more businesses liable for reporting requirements that might be inappropriate for them, which is why Companies House will be raising the thresholds from the start of the next tax year.
New company size thresholds
Though the defining numbers for company sizes will increase by around 50%, the number of employees will remain the same. To qualify as a micro-entity or a small or medium company, the company must not exceed more than two of the three criteria shown below:
| Company Size | Annual Turnover | Balance Sheet | Number of Employees |
| Micro-entity | £1 million
(previously £632,000) |
£500,000
(previously £316,000) |
10 |
| Small Company | £15 million
(previously £10.2 million) |
£7.5 million
(previously £5.1 million) |
50 |
| Medium Company | £54 million
(previously £36 million) |
£27 million
(previously £18 million) |
100 |
As a result of these redefinitions, over 100,000 small companies will be reclassified as micro-entities, which benefit from fewer reporting requirements – though lenders may still require detailed information to assess the creditworthiness of a micro-entity.
Small companies may be eligible for an audit exemption, so companies that were at risk of changing to a medium size classification can now avoid losing this exemption.
However, growing companies may prefer to retain their current reporting requirements to avoid disrupting their systems, even if there is an opportunity to move to a lower classification.
New identity verification rules
Along with changes to business disclosure rules and registered addresses in recent years, Companies House plans to intensify identity checks for directors and PSCs by next autumn.
Verification for existing companies will take place whenever a company files its confirmation statement over the subsequent 12 months. Action against non-compliant companies whose directors or PSCs fail to verify their identity will begin by the end of 2026.
These company size and identity verification transitions could be burdensome, but Companies House filing guidance is available to read through on the government website.
If you aren’t sure what this means for your company’s reporting next year, why not make the most of our company secretarial services at gbac, where we can manage this for you?
Our experienced accountants in Barnsley can ease the burden of statutory filing by managing your Companies House accounts on your behalf, in full compliance with the latest rules.
Call our team on 01226 298 298 to learn more about our financial services, or email your query to info@gbac.co.uk and we will get back in touch with more information shortly.