Thresholds based on a company’s accounts and employee numbers determine whether a company is categorised as small or not. Being able to qualify as a small or medium sized business can cut red tape for a business with the reduced amount of both non-financial and financial reporting a small or medium sized business is required to do.
The Prime Minister, Rishi Sunak, has announced that there will be 50% uplift to the current thresholds that determine a company’s size. The government expects that this will benefit up to 132,000 businesses.
The current thresholds were set by the EU, who recently uplifted its thresholds by 25%. However, following Brexit, the UK has greater freedom to set its own thresholds and so is opting for a larger increase.
It is intended that the new thresholds will apply to financial years that start on or after 1 October 2024.
The new thresholds mean that a company with less than £632,000 turnover will now qualify as a micro-entity. A small company will be one with turnover less than £15m, and the upper medium threshold will increase to £54m. Companies with a turnover above £54m will be classified as large.
If you want to know how these changes might affect your company, please call us and we will be happy to help you.
See: https://www.gov.uk/government/news/prime-minister-to-announce-major-reform-package-to-boost-apprenticeships-and-cut-red-tape-for-thousands-of-small-businesses#:~:text=This%20includes%20increasing%20the%20number,and%20non%2Dfinancial%20reporting%20requirements.
With the Budget coming on 30th October, speculation is increasing on what changes will be announced. The Chancellor and the Prime Minister have made comments to indicate that the Budget will bring “difficult decisions”.
The Competition and Markets Authority (CMA) has just published a new set of heat maps showing where businesses across the UK have received warning or advisory letters for potentially breaking competition law. It’s the first time the CMA has published this kind of information, and it’s a reminder for all businesses to ensure they’re on the right side of the law.
