Three Categories of SECR-Scope Organisation
SECR applies to three distinct categories of organisation under the SECR regulations:
Category 1: Quoted Companies (All Sizes)
Definition
All UK-incorporated quoted companies must comply with SECR, regardless of size.
What Makes a Company "Quoted"?
A quoted company means a company whose equity share capital is officially listed on:
- London Stock Exchange Main Market
- London Stock Exchange AIM (Alternative Investment Market)
- EEA-regulated markets
- Specified overseas markets including NYSE and NASDAQ
Key Points for Quoted Companies
- No size test applies — all quoted companies are in scope
- Public company filing deadlines apply (6 months after year-end)
- All quoted companies are public companies by definition
- UK SRS interaction — may become subject to UK SRS S2 from 2027
Category 2: Large Unquoted Companies
Size Test Requirement
Large unquoted companies must comply if they meet at least two of three size tests in the financial year:
| Threshold | Amount | Notes |
|---|---|---|
| Turnover | £36 million or more | Gross revenue for the year |
| Balance sheet total | £18 million or more | Total assets at year-end |
| Employees | 250 or more | Average over the year |
How Size Tests Work
Turnover Test (£36m threshold)
- Gross revenue from all sources during the financial year
- Includes: Sales, fees, interest, dividends, rental income
- Excludes: VAT and other taxes collected on behalf of HMRC
- Consolidated: Group turnover if preparing group accounts
Balance Sheet Total Test (£18m threshold)
- Total assets as shown on the balance sheet at year-end
- Gross assets before deducting liabilities
- Consolidated: Group balance sheet total if preparing group accounts
- Timing: Position at the accounting reference date
Employee Test (250 threshold)
- Average number calculated monthly or weekly throughout the year
- Includes: Directors, full-time, part-time, and temporary staff
- Pro-rata: Part-time staff counted proportionally
- Group basis: Combined employment if preparing group accounts
Two of three tests required
A company qualifies as large for SECR purposes if it meets at least two of the three size tests. Meeting just one test is insufficient for SECR scope.
Practical Examples
Example 1: Manufacturing Company
- Turnover: £45 million ✓
- Balance sheet: £15 million ✗
- Employees: 280 ✓
- Result: In SECR scope (meets 2 of 3 tests)
Example 2: Professional Services Firm
- Turnover: £25 million ✗
- Balance sheet: £22 million ✓
- Employees: 180 ✗
- Result: Not in SECR scope (meets only 1 of 3 tests)
Example 3: Property Investment Company
- Turnover: £8 million ✗
- Balance sheet: £85 million ✓
- Employees: 45 ✗
- Result: Not in SECR scope (meets only 1 of 3 tests)
Example 4: Technology Company
- Turnover: £40 million ✓
- Balance sheet: £20 million ✓
- Employees: 150 ✗
- Result: In SECR scope (meets 2 of 3 tests)
Category 3: Large LLPs
LLP Size Tests
Limited Liability Partnerships (LLPs) are subject to the same size tests as unquoted companies. An LLP qualifies for SECR if it meets at least two of:
- Turnover: £36 million or more
- Balance sheet total: £18 million or more
- Employees: 250 or more
LLP-Specific Considerations
- Legal status: LLPs are not companies but are subject to similar size-based requirements
- Filing deadline: 9 months after accounting reference date (same as private companies)
- Accounts preparation: Must prepare accounts under LLP regulations
- Partner vs employee: Members/partners typically count towards employee numbers
Threshold Calculation Details
When to Apply Size Tests
Size tests are applied during the financial year for which SECR disclosure is required:
- For 2026 filings: Apply tests to 2025 financial year data
- For 2027 filings: Apply tests to 2026 financial year data
- First-time qualifiers: SECR applies immediately upon meeting thresholds
Group Company Considerations
Subsidiary Companies
- Parent company: Apply size tests to consolidated group figures
- Subsidiary separately: Individual subsidiaries apply tests to own figures
- Both could be in scope: Parent and subsidiary may each qualify independently
Group Exemptions
- No group exemption: Each entity applies size tests independently
- Consolidated accounts: May use group figures for threshold calculation
- Multiple entities: Each SECR-scope entity must file own disclosure
Timing and Frequency
Annual Assessment
- Size tests applied annually based on each financial year's data
- Threshold changes: May fall in and out of scope year-on-year
- Forward planning: Consider multi-year SECR obligations
New Companies
- First year: Apply size tests to first financial period
- Short periods: Pro-rate thresholds for periods less than 12 months
- Future years: Establish ongoing SECR compliance monitoring
Common Threshold Questions
Q: What if we're exactly at a threshold?
If you meet a threshold exactly (e.g., exactly £36m turnover), you meet that test. The thresholds are "or more" criteria.
Q: What about overseas subsidiaries?
UK-incorporated companies apply thresholds based on their UK operations and worldwide operations as appropriate. Overseas subsidiaries of UK companies may be outside SECR scope.
Q: Do we need external verification of threshold calculations?
No specific requirement exists, but threshold calculations should be auditable and documented, particularly where companies are close to thresholds.
Q: What happens if we cross thresholds mid-year?
Size tests are applied to the full financial year. Mid-year changes in size affect the following year's SECR obligations.
SECR Thresholds vs UK SRS
The interaction between SECR thresholds and UK SRS scope affects planning:
SECR Scope vs UK SRS Scope
- SECR: Quoted companies + large unquoted companies/LLPs
- UK SRS S2 (proposed from 2027): ~515 UK-listed companies only
- Overlap: Most quoted companies will be subject to both
Planning Considerations
- Large unquoted companies: SECR remains primary framework
- Quoted companies: Prepare for potential UK SRS S2 overlap from 2027
- Thresholds unchanged: SECR thresholds remain in force
Annual threshold monitoring required
Companies should monitor their size against SECR thresholds annually. Crossing thresholds triggers immediate SECR obligations — there is no grace period for new qualifiers.
Threshold Monitoring Best Practice
- Annual review: Check size tests each financial year-end
- Forward planning: Monitor growth trajectory against thresholds
- Documentation: Maintain records of threshold calculations
- Professional advice: Consult specialists when close to thresholds
- System preparation: Establish SECR processes before qualifying
Understanding SECR thresholds is essential for compliance planning. The "two of three" test for large unquoted companies catches many mid-sized organisations, while quoted company rules apply regardless of size.