The micro-firm exemption: who gets until 31 March 2027

The test

gov.uk defines a micro-firm as a business with fewer than 10 full-time equivalent employees, and states that this relates to the total number of employees in a business, rather than at a certain business location. Its own worked example: a business with 3 locations and 5 employees in each location is not a micro-firm, because it has 15 employees in total, and recycling must be separated at all locations (gov.uk).

How to count

• Part-time employees count as a fraction, added on a pro-rated hours basis. Two people on half hours are one full-time equivalent.
• Volunteers do not count towards the total, which matters for small charities.
• Contractors and self-employed workers do not count either, so a firm running largely on subcontractors may sit under the threshold even with a busy site.
• Count the business, not the branch. Multi-site operators almost always fail the test even where each site is small.

You do not register for it

gov.uk states plainly that micro-firms have until 31 March 2027 to comply and do not need to register or apply for this temporary exemption. If a supplier tells you a registration or certificate is required to claim it, that is not what the guidance says. Keep your own note of the headcount calculation and the date you did it, because the burden of showing you were under the threshold falls on you if anyone asks.

What still applies before 2027

• Your collector's duty is already live. Waste collectors must collect dry recyclables and food waste separately from non-recyclable waste, whoever the customer is. In practice many micro-firms are already on separated collections for that reason.
• The duty of care is unchanged. Businesses and workplaces have a legal duty to ensure waste disposal is safe, secure and legal and to take all reasonable steps to keep waste to a minimum (gov.uk).
• Registered carriers, waste transfer notes, hazardous waste rules all continue to apply exactly as before.
• Crossing the threshold ends the concession. Grow past 10 full-time equivalents and you are in scope from that point, not from 2027.

Treat 31 March 2027 as a scheduled date rather than a certainty: it is set out in the current gov.uk guidance and in regulation 4 of the Separation of Waste (England) Regulations 2025, but commencement dates in this area have moved before. Check the guidance again before you plan a contract renewal around it.