In a welcome move to reduce complexity and obligations, with particular regard to non-financial reporting, the UK company size thresholds will be changed for financial years starting on or after 1 October 2024. Non-financial reporting has become increasingly complicated and therefore time consuming, requiring a diverse skill set and multidisciplinary approach to continuously adapt to the evolving reporting standards and expectations.
If the new measures are adopted, the thresholds will be increased as follows:
- Micro entity thresholds: turnover to up to £1m, balance sheet to up to £500k.
- Small thresholds: turnover to up to £15m, balance sheet to up to £7.5m.
- Upper medium threshold: turnover up to no more than £54m, balance sheet up to no more than £27m.
It’s predicted that 132,000 businesses will be exempted from non-financial reporting requirements as a result of this move, and we are assured that it won’t stop there, with a promise to introduce further measures to improve the process for digital reporting and eliminate requirements regarding what information companies must include in their annual reports.
Further consultation will take place later in the year in relation to defining a medium sized company for reporting purposes.
Gravita welcomes the changes to reducing the complexities and therefore time spent on non-financial reporting as well as the news of other changes, such as improvements to digital reporting, allowing us to use that time to focus more on judgement of the data, and giving proactive and strategic advice to our clients.
What next?
If you have any questions about the UK company size thresholds, please speak to a member of the Gravita team here.
