The Ombudsman’s traditional definition of a ‘small business’ is set to change as a result of EU legislation (the Payment Services Directive). From November 2009, when the Directive comes into effect, businesses with an annual turnover of up to €2m (currently approx £1.765m) will be covered by the FOS – as long as they have fewer than ten staff (so called ‘micro-enterprises’ in Euro speak). This raises the turnover limit from the current threshold of £1m (and by a substantial margin given current exchange rates) – but introduces the new, separate, requirement relating to the number of staff.  

Although the change has been prompted by the Directive, it will apply across the board.