How might the changes to company size thresholds affect your business?
From October 2024, company size thresholds are to increase by 50%. For each company, these new thresholds will begin to apply from the start of the next accounting period commencing on or after 1 October 2024. But what are the implications of these changes to your company?
The Companies Act 2006 makes requirements for what is included in the accounts that are filed at Companies House. These requirements are split into four categories or regimes based on the size of the company. These four sizes are described as micro-entity, small, medium-sized, and large.
A company generally falls into one of those four categories based on its turnover and Balance Sheet total. The larger the company, usually the more requirements there are as to what is included in the accounts.
The increase in the thresholds potentially means that many businesses will move down a category.
At first glance this is good news as it means reduced requirements for the accounts. However, there may be reasons why a company might decide not to take advantage of the change.
For instance, if a company is growing rapidly, stepping down a category may only be temporary. Because some reporting requirements rely on ongoing processes, it may be inconvenient to stop those processes only to have to start them a year or so down the line.
If you have any concerns about how the changes might affect your company, please feel free to contact us. We would be very happy to help advise you on the most suitable regime for your company.
A first-of-its-kind service for the UK has been launched to provide tax certainty to businesses planning to invest in major projects.
The latest annual report from the Charter Stakeholder Group remains highly critical of HMRC's service performance, with scores either stagnant or deteriorating across most standards. Alongside poor scores for responsiveness and ease of use, the report highlights overwhelmingly negative feedback on Making Tax Digital (MTD).