Micro-entity accounts are the shortest set of statutory accounts a UK limited company files at Companies House. The filing carries a balance sheet and limited notes, and nothing else. This guide sets out the current UK micro-entity thresholds, the companies excluded from the regime, and the reporting that applies when a company grows past the limits. Aqua Accounting, an ICAEW Registered Member Firm in Newcastle upon Tyne, prepares micro-entity accounts for companies across the North East.
What Are Micro-Entity Accounts?
Micro-entity accounts are a condensed statutory accounts format prepared under FRS 105, the Financial Reporting Standard applicable to the Micro-entities Regime. The filing at Companies House contains 2 components: a balance sheet and a limited set of notes. The profit and loss account and the directors’ report stay private. Competitors, credit agencies and data providers cannot read the company’s turnover or profit figures from the public register.
According to GOV.UK guidance, the online filing fee at Companies House is £34. Micro-entities also take the statutory audit exemption. HMRC receives the full accounts with the CT600 return, so the tax computation rests on complete figures.
Does My Company Qualify as a Micro-Entity?
Your company qualifies as a micro-entity when it meets at least 2 of the 3 size tests for the accounting period. The tests cover annual turnover, balance sheet total and average employee numbers. The table below sets out the UK micro-entity thresholds under both versions of the rules, split by the date the accounting period begins.
| Size test | Periods beginning on or after 6 April 2025 | Periods beginning 30 September 2013 to 5 April 2025 |
|---|---|---|
| Annual turnover | £1 million or less | £632,000 or less |
| Balance sheet total | £500,000 or less | £316,000 or less |
| Average number of employees | 10 or fewer | 10 or fewer |
A company meeting any 2 of these tests qualifies. The rule works in both directions: meet 2 tests and the company qualifies; breach 2 tests and the company falls outside the regime.
The following companies cannot use micro-entity accounts in any circumstances:
- public limited companies (PLCs)
- overseas companies
- unregistered companies
- charitable companies
- companies authorised to register under section 1040 of the Companies Act 2006
- companies excluded under section 384 or section 384B of the Companies Act 2006
- parents of a group that is not small
- parents of a small group that prepare consolidated accounts
- subsidiaries included in consolidated group accounts, unless the subsidiary itself qualifies as a micro-entity
The regime typically covers owner-managed companies including contractors, consultancies and independent retailers.
What If My Company Grows Too Big?
Your company drops out of the micro-entity regime when it breaches 2 of the 3 size tests. Qualification is measured year by year against each period’s figures. A company that qualifies for 2 consecutive years continues filing micro-entity accounts in the third year.
After exit, the next set of accounts follows the small companies regime under FRS 102 Section 1A, with fuller disclosures and expanded notes. Our Company Accounts service manages the transition and keeps filings compliant at both Companies House and HMRC.
How Do Micro-Entity Accounts Differ From Small Company Accounts?
Micro-entity accounts differ from small company accounts in the reporting standard, the size thresholds and the volume of disclosure. The table below compares the 2 regimes on 5 measures for accounting periods beginning on or after 6 April 2025.
| Measure | Micro-entity accounts | Small company accounts |
|---|---|---|
| Reporting standard | FRS 105 | FRS 102 Section 1A |
| Turnover cap | £1 million | £15 million |
| Balance sheet cap | £500,000 | £7.5 million |
| Employee cap | 10 | 50 |
| Public filing | Balance sheet and notes only | Balance sheet, notes, profit and loss account and directors’ report, unless filleted |
FRS 105 removes the accounting choices FRS 102 Section 1A permits. Fixed assets stay at historic cost with no revaluation option, development costs are expensed rather than capitalised, and deferred tax is not recognised. Small companies omit the profit and loss account from the public filing through filleting; micro-entities omit it by default. Fewer disclosures cut preparation time and accountancy fees.
Common Questions Answered
Does a micro-entity still pay Corporation Tax?
Yes. A micro-entity pays Corporation Tax in full on its taxable profits. The regime changes the Companies House filing format, not the tax charge. HMRC receives complete accounts and computations with every CT600 return.
Can a new company file micro-entity accounts in its first year?
Yes. A new company qualifies by meeting at least 2 of the 3 size tests in its first accounting period. New companies typically meet the tests from incorporation onward. Our Limited Company Formations service registers companies and sets the accounting reference date.
Is an audit compulsory for micro-entities?
No. Micro-entities take the statutory audit exemption available to small companies. An audit applies only in specific cases, including where shareholders holding at least 10% of the shares request one. Our Company Accounts service confirms each company’s exemption position before filing.
Does Companies House see the profit and loss account?
No. The micro-entity filing carries the balance sheet and limited notes only. The full profit and loss account goes to HMRC with the CT600 return under the Corporation Tax regime. Turnover and profit figures stay off the public register.
How Aqua Accounting Can Help
Aqua Accounting prepares and files micro-entity accounts for companies across Newcastle upon Tyne and the North East. The firm is an ICAEW Registered Member Firm of ICAEW Chartered Accountants with 13+ years serving North East businesses. Support runs from Limited Company Formations through to year-end accounts, with eligibility checks against the 2-of-3 tests before every filing.
Book a consultation before the next filing deadline. Aqua Accounting confirms whether the shortest statutory format applies to your company, then files the balance sheet and limited notes at Companies House on your behalf.
Disclaimer:
The information provided in this blog is for general informational purposes only and does not constitute professional advice. While every effort is made to ensure accuracy, Aqua Accounting accepts no responsibility for any actions taken based on this content. You should seek professional advice tailored to your individual circumstances.
Omar Ahmed is an ICAEW Chartered Accountant and the Director of Aqua Accounting, a UK-based accountancy practice providing expert accounting and tax services to individuals, sole traders, and small to medium-sized businesses. As a trusted accountant in Newcastle, he offers expertise in annual accounts, self-assessment tax returns, company accounts, VAT, payroll, bookkeeping, and company formation.
With a strong focus on delivering clear and practical financial advice, Omar helps clients stay compliant while improving their understanding of their finances. Through Aqua Accounting, he works closely with business owners to simplify accounting processes, meet tax obligations, and support informed financial decision-making.