Under UK company law, a private company that satisfies at least two of the following criteria for the current and preceding financial year:
A company that is in its first financial year may still qualify as a small company if it falls within these limits. Alternatively, if the company has qualified in the two preceding financial years, it may qualify.
Certain small companies may prepare accounts for their members under the special provisions of the Companies Act. In addition, they may prepare and deliver abbreviated accounts to the Registrar of Companies.
Some small companies with a turnover of less than £1 million (£250,000 for companies that are charities) and assets of less than £1.4 million can also claim total exemption from statutory audit. A company with a turnover of between £1 million and £5.6 million (and balance-sheet total of not more than £2.8 million) may also take advantage of the small company audit exemption, but will need an audit exemption report.
If a company is a member of a group containing a public company, a banking or insurance company, or an authorized person under the Financial Services Act 1986, it is not eligible for the exemptions for small companies.
http://www.companieshouse.gov.uk/about/gbhtml/gba3.shtml#three Further details on filing and audit exemptions from the Companies House website
Subjects: Financial Institutions and Services — Accounting.