Changes in financial thresholds for company sizes
From 6 April 2025, the Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024, SI 2024/1303 will amend the Companies Act 2006, ss 381-384B to change the entries in the tables for ‘turnover’ and ‘balance sheet total’ for micro-entities, small and medium-sized companies, and the entries for ‘aggregate turnover’ and ‘aggregate balance sheet total’ in respect of small and medium-sized groups. The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008 are also amended to reflect these changes for LLPs. This change is relevant to the fee level for sponsor licence applications in Worker routes and the Senior or Specialist Worker route, and for the Immigration Skills Charge. In these cases a sponsor organisation which falls within the small companies regime (or is a charity) is charged a lower sum. Note that the qualifying conditions for each size classification require that a company or group not exceed two out of three thresholds. These are a maximum figure for a company’s (i) annual turnover, (ii) balance sheet total, and (iii) its number of employees. This legislation will alter the thresholds for annual turnover and balance sheet total. The employee number threshold for small companies remains 50. Whereas before 6 April the relevant qualifying financial thresholds for small companies are not more than £10.2 million turnover and not more than £5.1 million balance sheet total, from that date this is changing to annual turnover of not more than £15 million and not more than £7.5 million balance sheet total. There is a transitional provision in relation to accounting periods, to allow companies and LLPs to benefit from the new thresholds as soon as possible after the legislation comes into force. Note also that there is a sponsor duty to report within 20 working days where a sponsor changes from falling within the small sponsor regime to not falling within it (or vice versa) (section C2, Workers and Temporary Workers: guidance for sponsors part 3: sponsor duties and compliance).