# Company size: micro-entity, small, medium-sized or large

Source: https://www.statutoryaccounts.io/guides/company-size/

Last reviewed: 26 October 2026

A UK company's size depends on turnover, balance sheet total and average employees: it qualifies for a size if it stays within two of the three limits. For financial years beginning on or after 6 April 2025 a small company has turnover up to £15m, balance sheet total up to £7.5m and up to 50 employees. A change counts only after two consecutive years.

## Thresholds for financial years beginning on or after 6 April 2025

| Size | Turnover | Balance sheet total | Average employees |
| --- | --- | --- | --- |
| Micro-entity (s384A) | up to £1m | up to £500,000 | up to 10 |
| Small (s382) | up to £15m | up to £7.5m | up to 50 |
| Medium-sized (s465) | up to £54m | up to £27m | up to 250 |
| Large | above two of the medium-sized limits | | |

As at 25 October 2026. For financial years beginning before 6 April 2025: micro-entity £632,000 and £316,000; small £10.2m and £5.1m; medium-sized £36m and £18m; employee limits unchanged.

## The two-year rule

In its first financial year a company qualifies if it meets the conditions in that year. After that, meeting or no longer meeting the conditions changes the company's size only if it happens in two consecutive financial years. One unusual year does not move a company up or down.

For a financial year beginning on or after 6 April 2025, earlier years are re-tested with the new thresholds when applying the two-year rule (SI 2024/1303, regulation 3). The new thresholds cannot be used for the accounts of a year that began before 6 April 2025.

## What the three figures mean

- Turnover: for a financial year that is not 12 months long, the turnover limit is adjusted in proportion; the other two limits are not.
- Balance sheet total: the total of the assets shown on the balance sheet, before deducting any liabilities (gross assets, not net assets).
- Average employees: the people employed under contracts of service in each month of the year, added up and divided by the number of months.

## Who cannot use the small or micro rules

Public companies, banks, insurers, e-money issuers and certain investment firms, and members of an ineligible group, are excluded from the small companies regime whatever their figures. Charities cannot use the micro-entity provisions. A parent company qualifies as small or medium-sized only if its group does.

Work out your size with the [company size calculator](https://www.statutoryaccounts.io/tools/company-size-calculator/).

## Terms, questions and tools

### [Company size calculator](https://www.statutoryaccounts.io/tools/company-size-calculator/)

Check whether a UK company meets the micro-entity, small or medium-sized conditions for a year, with the thresholds from 6 April 2025 or the earlier ones.

## Frequently asked questions

**Is the balance sheet total the same as net assets?**
No. It is the total of the assets shown on the balance sheet before any liabilities are deducted. A company with £600,000 of assets and £400,000 of liabilities has a balance sheet total of £600,000.

**What if my financial year is longer or shorter than 12 months?**
The turnover limit is adjusted in proportion to the length of the year; an 18-month period gives a small-company turnover limit of about £22.5m. The balance sheet total and employee limits stay the same.

**Do the new thresholds apply to my 2024 to 2025 accounts?**
Only if the financial year began on or after 6 April 2025. For a year that began earlier, the previous thresholds apply to those accounts, although they are re-read for the two-year test of later years.

**Can a charitable company be a micro-entity?**
No. Charities are excluded from the micro-entity provisions by section 384B of the Companies Act 2006, even if their figures are small enough.

## Sources

- [Companies Act 2006, section 382](https://www.legislation.gov.uk/ukpga/2006/46/section/382)
- [Companies Act 2006, section 383](https://www.legislation.gov.uk/ukpga/2006/46/section/383)
- [Companies Act 2006, section 384A](https://www.legislation.gov.uk/ukpga/2006/46/section/384A)
- [Companies Act 2006, section 384B](https://www.legislation.gov.uk/ukpga/2006/46/section/384B)
- [Companies Act 2006, section 465](https://www.legislation.gov.uk/ukpga/2006/46/section/465)
- [The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 (SI 2024/1303)](https://www.legislation.gov.uk/uksi/2024/1303/made)
- [FRC: amendments to FRS 102 and FRS 105 for the UK company size thresholds (March 2025)](https://www.frc.org.uk/news-and-events/news/2025/03/frc-releases-updates-to-reflect-company-size-threshold-amendments/)
- [Companies House: preparing and filing Companies House accounts](https://www.gov.uk/government/publications/filing-your-companies-house-accounts/life-of-a-company-part-1-accounts)

## Related pages

- [Statutory accounts for UK companies](https://www.statutoryaccounts.io/guides/statutory-accounts/)
- [Filing accounts at Companies House](https://www.statutoryaccounts.io/guides/companies-house-filing/)
- [UK GAAP frameworks: FRS 105, FRS 102 Section 1A and FRS 102](https://www.statutoryaccounts.io/guides/uk-gaap/)
- [Directors' report and strategic report](https://www.statutoryaccounts.io/guides/directors-and-strategic-reports/)
- [Corporation Tax and the CT600 return](https://www.statutoryaccounts.io/guides/corporation-tax/)