Real thin-walled composite structures such as aircraft or automotive structures are exposed to the development of various types of damage during operation. The effect of circular hole size on the strength of a thin-walled plate made of carbon fibre-reinforced polymer (CFRP) was investigated in this study. The test object was subjected to tensile testing to investigate the strength and cracking mechanism of the composite structure with variable diameter of the central hole. The study was performed using two independent test methods: experimental and numerical. With increasing diameter of the central hole, significant weakening of the composite plate was observed. The study showed qualitative and quantitative agreement between the experimental and numerical results. The results confirmed the agreement of the proposed FEM model with the experimental test. The novelty of this study is the use of the popular XFEM technique to describe the influence of the hole size on the cracking and failure of the composite structure. In addition, the study proposes a new method for determining the experimental and numerical damage and failure loads of a composite plate under tension.