New UK company size thresholds announced
The government has introduced new regulations that update company size criteria, impacting reporting requirements and audit needs. These changes will take effect for periods starting on or after 6 April 2025.
Companies qualifying as 'small' will likely be exempt from statutory audits. However, the upcoming FRS 102 changes in January 2026 may increase asset values for companies with significant operating leases, as both assets and liabilities will need to be reflected on the balance sheet. While accounting and audit exemptions may offer short-term benefits, they could prove costly in the long run. Companies should consider their long-term growth plans and review their covenant arrangements with lenders and articles of association.
Originally Published by Crowe UK, on 30 January 2025