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  1. Osome UK
  2. Business Vocabulary
  3. SMEs


“SMEs” or small and medium-sized enterprises is a special category of companies that is defined by a certain level of revenues, assets or number of employees. The industry where a company operates might also be a factor. The set of characteristics for a business to be seen as a SME varies for different countries.

The usual definition of small and medium-sized enterprises in the UK is a business with fewer than 250 employees.

Types of SMEs
Other SMEs definitions
SMEs popularity by industry
SMEs and the UK government
SMEs and grants
SMEs examples in the UK

Types of SMEs

SMEs in the UK are divided into 3 categories: medium, small and micro-businesses. Micro-businesses are those who have 0-9 employees, 10-49 employees is a characteristic of small businesses, and from 50 to 249 — it is a medium-sized business.

For now, SMEs constitute 99% of all businesses in the UK and accounting for small businesses is there for you to make your company records running smoothly.

Other SMEs definitions

Many organisations and bodies in the UK, though, choose to stick to their own definitions of SMEs and carry out all the statistics and analysis based on the meaning they outlined. Such things as the company’s turnover and balance sheet total might play as factors for determining the size of the company. For example, the Bank of England and the British Bankers Association (BBA) define SMEs as those with less than a £25 million annual turnover on their main business account. BBA goes further and narrows this definition to define small businesses as those having less than £1 million or £2 million annual turnover. So, dealing with this or that organisation, you should first find out whether you qualify for the SME for them, if this is a factor in what you want.

There is also a standard EU definition of SMEs and here, the number of employees and the volume of either a turnover or a balance sheet total matters.

Type of company Number of staff Turnover (OR) Balance sheet
Medium-sized < 250 ≤ € 50 m ≤ € 43 m
Small < 50 ≤ € 10 m ≤ € 10 m
Micro < 10 ≤ € 2 m ≤ € 2 m

SMEs popularity by industry

SMEs are popular in many sectors in the UK economy, but one of the recent statistics for 2019 shows that over a quarter of all SMEs are in the real estate, renting and business activities sector and the second sphere by popularity is the construction. SMEs are also widespread in:

  1. Transport, storage and communication
  2. Other community, social and personal service activities
  3. Wholesale and retail trade and repairs
  4. Health and social work
  5. Manufacturing
  6. Hotels and restaurants
  7. Agriculture, hunting, forestry and fishing

SMEs and the UK government

The UK government has been supporting SMEs, setting a plan of spending £1 in every £3 in working with them, directly or through the supply chain, by 2022. The government provides its support for SMEs through HMRC — HM Revenue and Customs, the government department responsible for collecting money to pay for the country’s public services and also taxes.

The support is also given through different schemes, like R&D tax credits. This program is aimed to give a corporation tax relief to research and development projects. The project should be innovative in science and technology. You can apply for R&D relief for SMEs if your company has less than 500 staff and a turnover of under 100 million euros or a balance sheet total under 85 million euros.


We’ve gathered all the points of support the UK government provides small businesses with during the COVID-19 pandemic. Read on to find out

SMEs and grants

The life of the UK-based SMEs is closely connected with the European Union and there have been multiple grants that have been supporting SMEs on the whole territory. With Brexit looming, but still hanging in the air, support programmes for SMEs have been adapted. Many of the grants are financed by the European Regional Development Fund (ERDF) and the UK government announced that they would secure all the ERDF projects when the UK leaves the EU. Moreover, they promised that all the projects due to be funded under 2014-2018 plans, will also be covered by the government. Here are just a few opportunities you can grab if you are an SME:

1.  Eureka Eurostars

It is a joint programme co-funded from multiple national budgets. The grant is aimed to help you make a business out of your idea. It supports innovative projects led by research and development-performing small- and medium-sized enterprises (R&D-performing SMEs).

2.  Horizon 2020

This is a broad, also innovation-driven project that covers multiple schemes for different spheres.

SMEs examples in the UK

There is no universal classification of the most popular and productive SMEs in the UK. However, multiple financial and business platforms, as well as organisations, have been drawing their own lists of best SMEs for a certain point in time/region/city/sphere. For example, each year, London Stock Exchange Group lists “1,000 Companies to Inspire Britain”. Or, in 2017, Forbes published a list of 10 UK most promising for 2018 tech SMEs.

Want to register your UK company online? Get in touch with us and we will assist you.

Author Osome Content TeamOsome Content Team

3 min readJan 28, 2020

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