The UK government’s decision to increase company size thresholds from April 2025 may be excellent news for bookkeepers and their clients.
These changes, which increase the monetary thresholds that define micro, small, and medium-sized entities, aim to simplify financial reporting, reduce administrative burdens, and make it easier for businesses to focus on growth. Here’s why this is a positive development for the bookkeeping profession:
Why It’s Good News
Simplified Reporting Obligations
Many companies will now qualify as smaller entities under the updated thresholds. A small company with turnover below £15 million (up from £10.2 million) will no longer need to comply with more stringent medium-sized company reporting requirements. Similarly, over 113,000 small businesses may become micro-entities, benefiting from the significantly reduced reporting obligations of FRS105. This frees up time and resources for both businesses and their bookkeepers.
Opportunities to Add Value
The reclassification of businesses creates an opportunity for bookkeepers to guide their clients through these changes. From helping clients optimise their reporting processes to explaining the implications on tax and compliance, bookkeepers can position themselves as indispensable partners in their clients’ success.
Simplified financial reporting translates to lower administrative costs for businesses. Bookkeepers can champion these savings while demonstrating how the new classifications align with their clients’ financial strategies. This adds tangible value and strengthens client relationships.
Focus on Strategic Support
With fewer resources required for compliance work, bookkeepers can shift their attention to offering insight that drives business growth. Whether it’sanalysing financial trends, improving cash flow management, or identifying growth opportunities, bookkeepers are well-placed to expand their advisory role.
How to Maximise the Opportunity
These threshold increases underscore the UK government’s recognition of the need to ease the burden on businesses while maintaining transparency and compliance. For bookkeepers, this is a moment to embrace, as it paves the way for greater efficiency and stronger client partnerships.
"This is fantastic news for businesses and bookkeepers alike! By easing the reporting requirements for so many companies, the government is giving businesses more breathing room to focus on growth and innovation. For Level 4 qualified ICB bookkeepers, it’s an exciting opportunity that increases the number of businesses they can support with year-end compliance. At ICB, we’re here to support our members every step of the way."
— Ami Copeland, CEO, ICB.
