SMEs \u2013 or small and medium-sized enterprises \u2013 are at the heart of the UK economy. Small businesses account for 99 per cent of all British businesses and contribute an estimated \u00a32 trillion combined in annual turnover to the UK economy.<\/p>\n\n\n\n
But what is an SME and how are SMEs defined? Plus, read on to find out how the government\u2019s categorisation of small businesses is changing in April 2025.<\/p>\n\n\n\n
SME stands for small or medium-sized enterprise. It’s a term used to categorise businesses that are smaller than large corporations, typically based on factors like their number of employees and turnover. <\/p>\n<\/div>\n\n\n\n
The UK definition of SME is generally a small or medium-sized enterprise with fewer than 250 employees.<\/p>\n\n\n\n
Within this umbrella there are three different categories:<\/p>\n\n\n\n
The Companies Act 2006 splits SMEs into three classifications based on their size, turnover, and balance sheet total.<\/p>\n\n\n\n