Starting 6 April 2025, the government will update the legal classification of company sizes. This change aims to make it easier for businesses to understand their reporting obligations and reduce administrative tasks, particularly for smaller businesses. These new thresholds will determine whether your business is considered small, medium, or large under the law.
Here's a quick look at the new thresholds, 2 out of the 3 criteria must be met to qualify:
🔹 Micro-entities:
Turnover: Up to £1m
Balance Sheet: Up to £500k
Employees: Up to 10
🔹 Small companies:
Turnover: Up to £15m
Balance Sheet: Up to £7.5m
Employees: Up to 50
🔹 Medium companies:
Turnover: Up to £54m
Balance Sheet: Up to £27m
Employees: Up to 250
🔹 Large companies:
Turnover: Over £54m
Balance Sheet: Over £27m
Employees: Over 250
Why Does This Matter?
Your company size determines your responsibility when it comes to IR35:
Small companies: Exempt from IR35. Contractors handle their own status.
Medium & Large companies: You’ll need to assess contractor IR35 status and ensure the right tax deductions are made. When you partner with Stonebridge, we take care of assessing contractor IR35 status and handling all the necessary tax deductions. We manage the entire process for you, including completing the required determination documentation, so you can stay compliant without the hassle.
What Should You Do? With these upcoming changes in April 2025, we wanted to clarify that for off-payroll working (IR35) purposes, these changes won’t affect our contractual chain parties right away. Company size is based on data from the previous financial year, and the new thresholds won’t impact IR35 status until 2026. So, whilst these updates are important, they won’t change IR35 obligations until the next tax year. We're discussing this now to ensure our clients are prepared and fully compliant with any future adjustments – but for now, it's business as usual.
Stonebridge is here to support you! Whether you're a small, medium, or large business, we provide expert guidance to help you meet your obligations. We provide fully insured Status Determination Statements (SDS) and professional legal support to ensure your compliance every step of the way.
Get in touch if you’d like to learn more about how we can protect your business.
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