On 18th March 2024, Rishi Sunak delivered his first economic speech since the Budget. In it he outlined two measures that will be of interest to businesses. Firstly, he announced that company size thresholds will change, simplifying both financial and non-financial reporting for many firms. Secondly, he said that government will fully fund apprenticeships for people under 21.

What are company size thresholds?

Government classifies businesses as belonging to one of four types: micro, small, medium and large.

Each category of business has different reporting requirements. While all businesses need to submit reports to Companies House, the content of the reports are determined by a company’s size. For example, medium and large businesses need to provide a strategic report, while all businesses except for micro-entities need to submit a directors’ report.

What are the current company size thresholds?

The current and proposed company size thresholds are set out in the two tables below.

Current company size thresholds

Two out of three Micro Small Medium Large
Annual turnover Under £632k Below £10.2m Under £36m £36m+
Balance sheet total Under £316k Below £5.1m Under £18m £18m+
Average no. of employees 10 or fewer 50 or fewer 250 or fewer 251+


Proposed company size thresholds

Two out of three Micro Small Medium Large
Annual turnover Under £1m Below £15m Under £54m £54m+
Balance sheet total Under £500k Below £7.5m Under £27m £27m+
Average no. of employees 10 or fewer 50 or fewer 250 or fewer 251+


As you can see, there’s a 50% uplift to these thresholds. The government anticipates that this will “benefit up to 132,000 businesses who will be spared from burdensome form-filling and non-financial reporting requirements.”

This figure can be broken down into:

  • 5,000 large companies being classed as medium, resulting in less onerous reporting
  • 13,000 medium companies being classed as small, allowing them to file simpler accounts and potentially benefit from audit exemption
  • 113,000 small companies being reclassified as micro-entities, allowing them to prepare simpler accounts.

Changes to reporting requirements

The government intends to consult on changes to reporting requirements. Proposals include:

  • Removing overlapping requirements from directors’ reports and directors’ remuneration reports
  • Making it simpler for companies to provide digital reports
  • Exempting medium-sized companies from providing a strategic report

When will the changes take place?

The government hopes that the changes will be available to companies with a financial year beginning on or after 1st October 2024.

What are the government’s apprenticeship proposals?

In addition to new company size thresholds, the Prime Minister announced a significant change to apprenticeships.

Essentially, the government is investing an extra £60m. It will use this money to fully fund apprenticeships by paying the entire cost of training anyone under the age of 21. It will also increase the amount of funding that employers who pay the apprenticeship levy can pass on to other businesses. At the moment, an employer can pass on up to 25% of their unused levy to another business. This will increase to 50%.

Both of these measures come into force on 1st April 2024. The government expects that the changes will result in an additional 20,000 apprenticeships.

My company size threshold will change. What should I do?

If your company size threshold will change under the government’s proposals, you don’t need to do anything just yet. Firstly, the changes won’t take effect until after a government consultation. However, if your reporting requirements do change after the changes take effect, your THP account manager will advise you.

Need further advice on any of the topics being discussed? Get in touch and see how we can help.

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    About Shahid Hameed

    Shahid Hameed is a Director of THP and works on auditing, management accounts and personal tax matters. Being a Responsible Individual (RI) for the firm he also signs off audits.

    As the firm’s Money Laundering Compliance Officer (MLRO) it is one of Shahid’s responsibilities to ensure that THP remains on top of all internal compliance matters and that the THP team is trained and up to date with AML compliance legislation.

    In addition to general audits, Shahid specialises in charity audits and solicitors client money rules.

    Having worked with Foulds & Grant before the merger with THP, Shahid has built up calm, honest and respectful relationships with his clients. Further development and promotion to Director within the firm in 2023 provided Shahid with more opportunity for greater variety in his work which he very much enjoys.

    A keen sports fan, Shahid follows cricket around the world.

    Shahid’s specialist skills:

    • Annual Accounts
    • Management Accounts
    • Tax
    • General Audits
    • Charity Audits
    • Accounting for solicitors and legal firms
    • Training and Compliance


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