Micro-Entity Accounts
Micro-Entity Accounts
Simple accounts for the UK’s smallest companies. Learn who qualifies, what must be included and how micro-entity accounts are filed with Companies House and HMRC.
- Current 2025 threshold changes
- Clear two-out-of-three eligibility test
- FRS 105 explained in plain English
- Companies House and HMRC deadlines
What are micro-entity accounts?
Micro-entity accounts are simplified statutory accounts for the smallest UK limited companies. An eligible company may use FRS 105, provide fewer disclosures and file a reduced balance sheet at Companies House. The company must still prepare proper accounts for its members, submit accounts and tax computations with its Company Tax Return to HMRC, and keep records that support every figure.
Who qualifies as a micro-entity?
For an accounting period beginning on or after 6 April 2025, a company normally qualifies if it satisfies at least two of these three limits:
Total income generated in the accounting period.
Broadly, the aggregate value of assets before deducting liabilities.
The average number employed during the accounting period.
Old and new micro-entity thresholds
| Test | Periods beginning before 6 April 2025 | Periods beginning on or after 6 April 2025 |
|---|---|---|
| Annual turnover | £632,000 or less | £1 million or less |
| Balance sheet total | £316,000 or less | £500,000 or less |
| Average employees | 10 or fewer | 10 or fewer |
The start date of the accounting period—not the filing date—determines which monetary thresholds apply.
Who cannot prepare micro-entity accounts?
Meeting the size tests is only the first step. Public companies, charitable companies, certain financial services and insurance businesses, and companies within some ineligible groups cannot use the micro-entity regime. A subsidiary may also need additional checks before relying on an exemption.
What do micro-entity accounts include?
Profit and loss account
Income, expenses, tax and the resulting profit or loss for the financial year.
Balance sheet
Assets, liabilities and shareholders’ funds at the accounting period end, approved and signed by a director.
Minimum notes
The disclosures required by law and FRS 105, including relevant commitments and certain director transactions.
A micro-entity is generally exempt from preparing a directors’ report. The accounts use simplified formats, but they remain statutory accounts—not an estimate, bank summary or copy of the bookkeeping ledger.
Are micro-entity accounts public?
The copy filed at Companies House becomes part of the public record. Under the current filing position, an eligible micro-entity can file only its balance sheet with reduced information, so its profit and loss account need not normally appear on the public register.
How to prepare and file micro-entity accounts
Confirm eligibility
Apply the correct thresholds for the period, the two-out-of-three test and any exclusions.
Complete the bookkeeping
Reconcile the bank, sales, expenses, payroll, VAT, loans, fixed assets and director’s loan account.
Prepare compliant accounts
Apply FRS 105, calculate year-end adjustments and corporation tax, and produce the statutory statements and notes.
Obtain director approval
A director approves the accounts and signs the balance sheet on behalf of the board.
File at Companies House
Submit the permitted filing copy by the statutory deadline and retain evidence of acceptance.
File with HMRC
Submit the CT600, accounts and corporation tax computations separately. Pay corporation tax by its own deadline.
Micro-entity accounts filing deadlines
| Requirement | Typical deadline for a private company | Important distinction |
|---|---|---|
| First accounts to Companies House | Usually 21 months after incorporation | The exact date can vary with the first accounting reference period. |
| Later accounts to Companies House | 9 months after the financial year end | Late filing penalties increase with delay. |
| Corporation tax payment | Usually 9 months and 1 day after the accounting period ends | This is a payment deadline, not the CT600 filing deadline. |
| Company Tax Return (CT600) | Usually 12 months after the accounting period ends | Filed with accounts and tax computations. |
Micro-entity accounts vs small company accounts
| Feature | Micro-entity accounts | Small company accounts |
|---|---|---|
| Main accounting standard | FRS 105 | Usually FRS 102 Section 1A |
| Disclosure | Statutory minimum | More notes and accounting detail |
| Accounting choices | More restricted | Greater flexibility in some areas |
| Public filing | Reduced balance sheet filing currently available | Small-company filing options may apply |
| Often best for | Straightforward owner-managed companies | Growing businesses or those needing fuller stakeholder information |
Qualifying does not force a company to use FRS 105. Fuller small-company accounts may communicate more useful information to lenders, investors, landlords or prospective buyers. The best regime depends on the company’s transactions and who uses its accounts—not only the preparation fee.
Common micro-entity accounting mistakes
- Using the latest thresholds for an accounting period that began before they took effect.
- Assuming that being below one limit is enough—the company must normally meet two of the three tests.
- Treating money taken by a director as an expense instead of salary, dividend or a director’s loan.
- Submitting the Companies House balance sheet but overlooking the CT600, computations or corporation tax payment.
- Using FRS 105 where the company is excluded or where another reporting framework would be more suitable.
- Leaving bookkeeping and reconciliations until immediately before the filing deadline.
Micro-entity accounts FAQs
Do I have to file micro-entity accounts if my company qualifies?
No. Eligibility allows the company to use the micro-entity regime, but directors may choose fuller small-company accounts when that better serves the business.
Can I prepare micro-entity accounts myself?
Yes, a director may prepare and file the accounts. The legal responsibility remains with the directors whether or not an accountant is appointed. Accurate bookkeeping, year-end adjustments, FRS 105 presentation and corporation tax work are still required.
Do micro-entity accounts show turnover?
The full accounts include a profit and loss account containing turnover. Under the current filing options, the reduced copy filed at Companies House does not normally include that profit and loss account.
Are micro-entity accounts audited?
Most micro-entities also qualify for audit exemption. An audit can still be required because of the company’s activities, group circumstances, articles or a valid request by members holding at least 10% of the relevant shares.
Are micro-entity accounts suitable for a property company?
Many small property companies qualify, but FRS 105 accounting treatments and the information required by lenders should be considered. Qualification alone does not always make the micro-entity regime the best commercial choice.
What is the difference between micro-entity and dormant accounts?
Micro-entity is a company-size and reporting regime. Dormant describes a company with no significant accounting transactions during the period. A micro-entity may trade actively; a dormant company generally does not.
Need your micro-entity accounts prepared and filed?
The Online Accountants can confirm eligibility, prepare compliant statutory accounts and submit the accounts and Company Tax Return online—wherever you are in the UK.