Changes to what constitutes a “small company”
24 April 2025
If you need to consider the off-payroll working rules there is an important change relating to company size thresholds that you need to be aware of.
From 6 April 2025, the government thresholds that determine if a company is classified as ‘small’ changed. For accounting periods beginning on or after 6 April 2025 a private company or organisation will now be considered small if two out of the three following conditions are met:
• turnover of not more than £15 million (increased from £10.2 million)
• balance sheet total of not more than £7.5 million (increased from £5.1 million)
• monthly average number of employees of not more than 50 (no change)
The conditions above can be found at section 382 of the Companies Act 2006.
A large or medium-sized client is responsible for determining the employment status of any worker supplying their services through an intermediary — usually a personal service company.
The threshold changes will have no practical impact until 6 April 2027, at the earliest, because a company’s size is determined by reference to previous years.