Company accounts
Companies Act company size checker
A company's size under the Companies Act decides what accounts it prepares, whether it needs an audit, and what ends up on the public record that a lender will read. The test looks simple, two of three limits, but it runs over two years, and for financial years beginning on or after 6 April 2025 the limits went up by around half. Put in your own figures and this shows where the company lands.
The test
Two of three limits, looked at over two years
A company meets the conditions for a size in a year when it satisfies two or more of three requirements: turnover, balance sheet total and average number of employees, each no more than a set limit. The balance sheet total is gross assets, the total of everything shown as an asset, not net assets. Employees are a monthly average across the financial year. If the financial year isn't twelve months long, the turnover limit is scaled up or down in proportion; the other two limits aren't.
Meeting the conditions in one year isn't the whole answer. In its first financial year a company takes the size its figures give it. After that, a change only counts once it has happened in two consecutive years: a small company that grows past the limits for one year stays small, and a medium-sized company that drops under the small limits for one year stays medium-sized (section 382, 384A and 465).
The thresholds
Financial years beginning on or after 6 April 2025
Each figure is a maximum ("not more than"). A company that doesn't qualify as medium-sized is large for these purposes.
Parent companies: the group has to qualify too
A parent company only qualifies as small or medium-sized if the group it heads does (section 383 and section 466). The group figures are the members' figures added together, either net (after eliminating intra-group transactions) or gross (without those adjustments), and each requirement can be met on whichever basis suits.
| Group size | Aggregate turnover | Aggregate balance sheet total | Employees |
|---|---|---|---|
| Small group | £15 million net or £18 million gross | £7.5 million net or £9 million gross | 50 |
| Medium-sized group | £54 million net or £64 million gross | £27 million net or £32 million gross | 250 |
A parent qualifies as a micro-entity only if it meets the micro-entity conditions on its own figures and the group qualifies as small (s384A(8)), and the micro-entity rules don't apply at all if it prepares group accounts (s384B(2)).
What changed in April 2025
The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 raised the two money limits at every size and left the employee limits alone.
| Limit | Before | From 6 April 2025 |
|---|---|---|
| Micro-entity turnover | £632,000 | £1 million |
| Micro-entity balance sheet total | £316,000 | £500,000 |
| Small turnover | £10.2 million | £15 million |
| Small balance sheet total | £5.1 million | £7.5 million |
| Small group, turnover (net / gross) | £10.2 million / £12.2 million | £15 million / £18 million |
| Small group, balance sheet total (net / gross) | £5.1 million / £6.1 million | £7.5 million / £9 million |
| Medium-sized turnover | £36 million | £54 million |
| Medium-sized balance sheet total | £18 million | £27 million |
| Medium-sized group, turnover (net / gross) | £36 million / £43.2 million | £54 million / £64 million |
| Medium-sized group, balance sheet total (net / gross) | £18 million / £21.6 million | £27 million / £32 million |
| Employees (micro / small / medium) | 10 / 50 / 250 | 10 / 50 / 250, unchanged |
Both columns come from the 2024 Regulations themselves: each amendment names the old limit it replaces and the new one, in Companies Act 2006 sections 382, 383, 384A, 465 and 466.
The new figures apply to financial years beginning on or after 6 April 2025 (regulation 2(2)). The part that's easy to miss is regulation 3: when deciding a company's size for one of those years, earlier years are judged as if the new figures had applied to them too. So a company doesn't have to wait two years of meeting the higher limits before it drops a size.
Worked example 1
A company that was medium-sized on the old figures
Financial year starting 1 January 2026. This year: turnover £12 million, balance sheet total £6 million, 60 employees. Last year: turnover £9.8 million, balance sheet total £5.4 million, 55 employees. It filed as medium-sized last year: against the old small limits, last year's figures met only 1 of 3. Against the new ones, both years meet 2 of 3, and because regulation 3 re-tests last year on the new figures, the company is small for the year starting 1 January 2026, without waiting a second year.
| Small test | Turnover | Balance sheet total | Employees | Conditions met |
|---|---|---|---|---|
| This year, new limits | Yes | Yes | No | 2 of 3: met |
| Last year, new limits (as regulation 3 requires) | Yes | Yes | No | 2 of 3: met |
| Last year, old limits (how it was filed) | Yes | No | No | 1 of 3: not met |
Worked example 2
A small company that grows past the limits
Same rules, a company that was small last year. This year turnover reaches £17 million and the balance sheet total £8 million, with 45 employees. That's only 1 of 3, so the small conditions aren't met this year. Last year they were (3 of 3). A change only counts once it has happened in two consecutive years, so the company is still small this year. If next year's figures are over the limits again, it becomes medium-sized for next year.
| Small test, new limits | Turnover | Balance sheet total | Employees | Conditions met |
|---|---|---|---|---|
| Last year | £13 million: Yes | £6.5 million: Yes | 42: Yes | 3 of 3: met |
| This year | £17 million: No | £8 million: No | 45: Yes | 1 of 3: not met |
| Size this year | Small (the change hasn't happened in two consecutive years yet) | |||
Check your own figures
Work out the company's size
Free to use, nothing is saved or sent anywhere. Runs entirely in your browser. The boxes start with worked example 2; change them to your own.
Size for this financial year
Small
Small conditions not met this year (1 of 3) but met last year (3 of 3), so last year's status stands until the change happens in two consecutive years.
| Size | This year | Previous year | Qualifies |
|---|---|---|---|
| Micro-entity | 0 of 3 | 0 of 3 | No |
| Small | 1 of 3 | 3 of 3 | Yes |
| Medium-sized | 3 of 3 | 3 of 3 | Yes |
Limits: Companies Act 2006, sections 382, 383, 384A, 465 and 466, as amended by SI 2024/1303 for financial years beginning on or after 6 April 2025; earlier figures as they stood before that amendment. Exclusions: sections 384, 384B and 467. The micro-entity rules also don't apply to investment undertakings, financial holding undertakings, credit institutions or insurance undertakings (section 384B(1)); the checker doesn't ask about those separately. "Conditions met" means two or more of the three limits. This checks the Companies Act accounting size only. Other rules that use the word "small", such as the SME definition for R&D relief, have their own tests. Not legal or accounting advice.
What the size decides
Accounts, audit, and what goes on the register
- Micro-entity. The simplest statutory accounts. A micro-entity can also use the small company exemptions, including audit exemption.
- Small. The small companies regime for preparing and filing accounts, and exemption from audit under section 477, unless members holding at least 10% of the issued share capital by nominal value ask for one (section 476) or the company is excluded (section 478).
- Medium-sized. Full accounts with a few reporting concessions compared with a large company, but an audit is required unless another exemption applies, such as the ones for dormant companies and some subsidiaries. The medium-sized provisions aren't available to public companies or to firms with FCA permission for any regulated activity (section 467).
- Large. Full accounts, a strategic report, a directors' report and an audit.
Why lenders care
A small company's public accounts often won't answer a lender's questions
Companies House guidance says small companies and micro-entities can currently file accounts at Companies House without the profit and loss account. So for many established businesses, a lender looking at the public register sees a balance sheet and very little about trading. That's why a lender will ask for the full accounts sent to shareholders, and usually management accounts too, before it gets to credit.
That's changing. According to Companies House's accounts guidance, from 1 April 2028 small companies and micro-entities will have to deliver a profit and loss account to Companies House, with an option to keep it off the public register; abridged accounts will no longer be accepted; accounts will have to be filed using commercial software; and a company claiming audit exemption will need an enhanced directors' statement on the balance sheet confirming it qualifies.
Is a lender asking for accounts you don’t publish?
Small and micro companies can put very little on the public record, so lenders usually ask for full accounts and management figures directly. If that's where a funding conversation has stalled, tell us what's happening.
Adam Parker
Founder of Muswell Rose Consulting Ltd, which trades as Established Finance · former Managing Director of Penny, an invoice finance business, working in mortgages, commercial finance and fintech lending since 2010 (career history).
Last reviewed:
Common questions
Questions about this
Is the balance sheet total the same as net assets?
No. The Companies Act defines the balance sheet total as the aggregate of the amounts shown as assets in the balance sheet, so it is gross assets before any liabilities are deducted (section 382(5), section 384A(6) and section 465(5)).
When did the higher thresholds start?
They apply to financial years beginning on or after 6 April 2025, under the Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 (SI 2024/1303). For those years, earlier years are also tested against the new figures when working out whether the company qualified before.
How are employees counted?
As a monthly average: the number of people employed under contracts of service in each month of the financial year, added together and divided by the number of months. Directors on a contract of service count; contractors who are not employees do not.
Does qualifying as small mean no audit?
Usually. Section 477 exempts a company that qualifies as small from audit, but members holding at least 10% of the issued share capital by nominal value, or of any class of shares, can require one by notice (section 476), and public companies, banks, insurers and some other financial firms cannot use the exemption (section 478). A small company in a group also has to meet the group conditions in section 479.