Section 383 | Companies qualifying as small: parent companies

From legislation.gov.uk

(1)A parent company qualifies as a small company in relation to a financial year only if the group headed by it qualifies as a small group.

(2)A group qualifies as small in relation to the parent company's first financial year if the qualifying conditions are met in that year.

(2A)Subject to subsection (3), a group qualifies as small in relation to a subsequent financial year of the parent company if the qualifying conditions are met in that year.^F1

(3)In relation to a subsequent financial year of the parent company, where on the parent company’s balance sheet date the group meets or ceases to meet the qualifying conditions, that affects the group’s qualification as a small group only if it occurs in two consecutive financial years.^F2

(4)The qualifying conditions are met by a group in a year in which it satisfies two or more of the following requirements—^F3F4

Table
1. Aggregate turnover	Not more than £15 million net (or £18 million gross)
2. Aggregate balance sheet total	Not more than £7.5 million net (or £9 million gross)
3. Aggregate number of employees	Not more than 50

(5)The aggregate figures are ascertained by aggregating the relevant figures determined in accordance with section 382 for each member of the group.

(6)In relation to the aggregate figures for turnover and balance sheet total—^F5

“net” means after any set-offs and other adjustments made to eliminate group transactions—

(a)in the case of Companies Act accounts, in accordance with regulations under section 404,

(b)in the case of IAS accounts, in accordance with UK-adopted international accounting standards; and

“gross” means without those set-offs and other adjustments.

A company may satisfy any relevant requirement on the basis of either the net or the gross figure.

(7)The figures for each subsidiary undertaking shall be those included in its individual accounts for the relevant financial year, that is—

(a)if its financial year ends with that of the parent company, that financial year, and

(b)if not, its financial year ending last before the end of the financial year of the parent company.

If those figures cannot be obtained without disproportionate expense or undue delay, the latest available figures shall be taken.

Notes

F1
S. 383(2A) inserted (with effect in accordance with reg. 2(2) of the amending S.I.) by The Small Companies (Micro-Entities' Accounts) Regulations 2013 (S.I. 2013/3008), regs. 2(1), 4(3)(a) (with reg. 3)
F2
S. 383(3) substituted (with effect in accordance with reg. 2(2) of the amending S.I.) by The Small Companies (Micro-Entities' Accounts) Regulations 2013 (S.I. 2013/3008), regs. 2(1), 4(3)(b) (with reg. 3)
F3
Words in s. 383(4) table substituted (6.4.2025) by The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 (S.I. 2024/1303), regs. 1(2), 9(2)(a) (with regs. 2(2), 3)
F4
Words in s. 383(4) table substituted (6.4.2025) by The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 (S.I. 2024/1303), regs. 1(2), 9(2)(b) (with regs. 2(2), 3)
F5
Words in s. 383(6) substituted (31.12.2020 with effect in relation to financial years beginning on or after IP completion day) by The International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/685), reg. 1(2)(3), Sch. 1 para. 2 (with reg. 1(4)-(8), Sch. 1 para. 64) (as amended by S.I. 2020/335, regs. 1, 3, 4 and S.I. 2020/523, regs. 1(2), 22, 25(b)); 2020 c. 1, Sch. 5 para. 1(1)