FinancesWhat size is my business?

What size is my business?

In the UK there are a number of classifications that help define the type of business you are running. It’s important to know how your business is classified because many different government departments use this information to set rules and requirements for things like the amount of detail required when you submit your annual company accounts. And, in addition, many different industries will base their pricing of products and services based on the classification of your company.

Businesses in the UK

There are approximately 5.5 million private sector businesses in the UK (in 2022 when the last figures were published), which is a little down on the previous year with a 1.5% drop in total numbers.

In the UK, almost three-quarters (74%) of businesses have no employees and over 99% of businesses are employ less than 250 employees, classing them as small or medium-sized businesses (SMEs) which employ 0-249 people.

If you think that all the jobs and trade is due to the largest corporate companies, think again! These SMEs together accounted for 61% of all employment in the UK and 7% of all business turnover in the UK. In comparison, there were just 8,000 large businesses each employing 250 or more employees. However, these 8,000 large business might represent just 0.1% of the business population but they provide 39% of jobs in the UK and nearly half of all business turnover.

Micro-Entities

Number of businesses: 5,248,000 (95% of all UK businesses)

Employing 8,708,000 jobs (32% of all UK jobs)

Generating £808bn of revenue (19% of all UK revenue)

The classification called ‘micro-entities’ is for very small companies and is defined by the UK Government as a business that meets any two of the following: its turnover is £632k or less, it has £316k or less on its balance sheet, it has 10 employees or less.

Definition of a micro-entity-sized company as set by the UK Government:

  • Turnover: Not more than £632,000
  • Balance Sheet Total: Not more than £316,000
  • Average Number of Employees: Not more than 10

Small Companies

Number of businesses: 217,000 (4% of all UK businesses)

Employing 4,228,000 jobs (16% of all UK jobs)

Generating £609bn of revenue (15% of all UK revenue)

The classification called ‘small company’ is defined by the UK Government as a business that meets any two of the following: its turnover is £10.2m or less, it has £5.1m or less on its balance sheet, it has 50 employees or less.

If your business is classed as a small company then you have fewer requirements in filing annual company accounts and can send abridged accounts to Companies House and do not have to file full P&L unless you want to.

Definition of a small-sized company as set by the UK Government:

  • Turnover: Not more than £10.2 million
  • Balance Sheet Total: Not more than £5.1 million
  • Average Number of Employees: Not more than 50

Medium-Sized Companies

Number of businesses: 36,000 (1% of all UK businesses)

Employing 3,497,000 jobs (13% of all UK jobs)

Generating £708bn of revenue (17% of all UK revenue)

Definition of a medium-sized company as set by the UK Government:

  • Turnover: Not more than £36 million
  • Balance Sheet Total: Not more than £18 million
  • Average Number of Employees: Not more than 250

Large Companies

Number of businesses: 8,000 (0.1% of all UK businesses)

Employing 10,662,000 jobs (39% of all UK jobs)

Generating £2,032bn of revenue (49% of all UK revenue)

Definition of a large-sized company as set by the UK Government:

  • Turnover: More than £36 million
  • Balance Sheet Total: More than £18 million
  • Average Number of Employees: More than 250

Written by

Mark Hodgson
Mark Hodgsonhttps://gosmallbusiness.co.uk
Mark Hodgson is one of our expert writers. Mark is our lead researcher and editor who writes our main guides and expert topic coverage. He’s passionate about helping entrepreneurs, startups and small businesses with practical advice delivered clearly. Mark’s worked for a number of business magazines and titles and has started two small businesses himself, so has first-hand experience in setting up, managing and growing a small business and shares his expertise with our readers.

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