Small company thresholds
This guide explains the main small-company size tests and why a quick threshold screen is useful before deeper reporting analysis.
What the size tests are doing
The small-company regime usually turns on the main turnover, balance sheet total, and employee tests, with at least two of the three needing to be met.
That makes a size threshold screen a practical first step before more detailed group or reporting review is undertaken.
Rule summary
Rules and how this is calculated
For financial years starting from 6 April 2025, meet at least two of turnover no more than £15 million, balance sheet total no more than £7.5 million and average employees no more than 50. Earlier supported years use £10.2 million, £5.1 million and 50.
Non-annual financial years require proportionate turnover adjustment and are outside this version. Balance sheet and employee limits are not mechanically time-scaled.
First-year qualification uses current conditions. In later years, use both previous-year conditions and previous-year qualification: two consecutive adverse numerical years can end an existing qualification; two qualifying numerical years can establish it. Unknown history yields review required.
SI 2024/1303 requires prior-year conditions and qualification to be reassessed under increased thresholds for the 2025 transition. The tool asks for those reassessed facts; it does not reconstruct historical accounts.
Group membership requires a separate group/ineligibility analysis. Public companies and specified regulated financial/insurance classes cannot use the small-company regime merely because size limits are met.
Worked examples
How the rule behaves in practice
- Current numerical boundary: First 12-month financial year starts 6 April 2025: turnover £15 million, balance sheet £7.5 million, average employees 51; eligible standalone private company. Two of three conditions are met, including values exactly on the monetary limits: qualifies under these supplied supported facts.
- One adverse year: This year's numbers fail, but the previous year met the conditions and qualified as small under the applicable rules. Qualification can continue for this year. Another consecutive adverse year with prior conditions not met would end it.
Practical consequences
- A business that sits near the threshold can drift between regimes or create avoidable filing confusion if the size question is left vague.
- Group position and exclusions can make a borderline case more complex than the raw numbers suggest.
Important limits
- Professional review is required for exclusions, disputed dates and facts outside the supported case. No enforcement outcome is predicted.
Primary sources and review date
Reviewed on . Preserved source review from the accepted scoped statutory repair; this contract migration does not re-date that review.
Applies to: Twelve-month years starting from 1 January 2016; higher thresholds for years beginning on/after 6 April 2025, with SI 2024/1303 transition.
Reviewed scope: Standalone private-company screen with supplied continuity and eligibility facts; non-annual periods, groups and unknown history require review; not an audit-exemption opinion.
- Companies House — accounts deadlines, month-end rule, size and exclusions (verified 26 September 2026)Supports: accounts deadlines, month-end rule, size and exclusions
- SI 2024/1303 — effective years and retrospective transition (verified 26 September 2026)Supports: effective years and retrospective transition
Review basis and change triggers
Reviewed model: small-company-threshold-checker: companies-house-reviewed-26 September 2026
- A cited source or statutory regime changes.
- Reviewed content, runtime adapter or domain implementation changes.
- A new effective period falls outside the supported scope.
Turn the result into an action plan
- Use the checker to screen the size position quickly.
- Compare the result with the micro-entity rules if the company may fall into the smaller regime.
- Once the regime is clearer, line it up with the correct filing workflow and calendar.
Use the tool
Small Company Threshold Checker
Separate the two-out-of-three size test from supplied continuity, group and legal eligibility facts.
FAQ
Does this tool confirm Companies House's actual recorded position?
No. It calculates or interprets the facts you supply; confirm the register, Gazette or professional advice where required.