Category: Companies House

Increase in threshold for Small Companies Regime

What is it ?

 

A company in the UK qualifies as a Small Company if it fullfills two of the following three criterias:

 

Turnover – not more than £6.5m

Balance sheet total – not more than £3.26 m

Employee – not more than 50

 

UK Government has increased these limits to comply with EU Accounting Directive

via a new regulation

 

Turnover – not more than £10.2m

Balance sheet total – not more than £5.1 m

Employee – remain same at 50.

 

From when the rules change ?

Rules change for accounting period begining on or after 1 Jan 2016.

 

Why it is important ?

 

Small companies donot have to get their books audited.

 

This will reduce the administrative burden on lot of small companies and allow them to focus on their business.

Companies : Micro,Small or Medium

Listed below are criteria for different types of companies in the UK.

Micro companies – Your company will be a micro-entity if it has any 2 of the following:

Turnover Below £632,000

Balance sheet total Below £316,000

Employee Below 10

Small Companies – Your company will be ‘small’ if it has any 2 of the following:

Turnover Below £6.5 million   £10.2 million

Balance sheet total Below £3.26 million  £5.1 million

Employee Below 50

Medium Companies- Your company will be ‘medium’ if it has any 2 of the following:

Turnover Below £25.9 million

Balance sheet total Below £12.9 million

Employee Below 250