Reviewed: 9 October 2026. Micro-entity accounts allow eligible very small UK companies to use a simplified statutory reporting regime. The eligibility thresholds changed for financial years beginning on or after 6 April 2025, so older articles quoting £632,000 of turnover as the current limit can mislead business owners.
What are micro-entity accounts?
A micro-entity is a very small company that meets the statutory eligibility criteria and is not excluded from using the regime. Qualifying companies may use the FRS 105 financial reporting framework and simplified statutory accounts, but they still need appropriate records, accounts for their members, Companies House filings and tax computations or returns where required. Simplified reporting is not an exemption from Corporation Tax.
Micro-entity thresholds: what changed in April 2025?
For a financial year beginning on or after 6 April 2025, a company normally needs to meet at least two of three criteria to qualify, subject to exceptions and the two-year rule for changes in status:
| Criterion | Periods beginning before 6 April 2025 (relevant older regime) | Periods beginning on or after 6 April 2025 |
|---|---|---|
| Annual turnover | Not more than £632,000 | Not more than £1 million |
| Balance sheet total | Not more than £316,000 | Not more than £500,000 |
| Average employees | Not more than 10 | Not more than 10 |
The appropriate test depends on the start of the financial year, group circumstances and whether this is the company’s first or a later financial year. For shortened or extended years, and for companies moving in or out of qualification, further rules apply. See Companies House guidance, section 9 and Companies Act 2006, section 384A.
Who cannot necessarily use micro-entity accounts?
Some entities, regulated activities and group situations are excluded from the micro-entity provisions even where the turnover and balance-sheet numbers look small. For example, public companies and certain financial services entities cannot simply elect to use the regime. An accountant should check legal form, group membership, statutory exclusions and reporting needs before confirming eligibility.
Micro-entity accounts vs small-company accounts
- Micro-entity accounts: simpler presentation and disclosures for a qualifying company, typically using FRS 105.
- Small-company accounts: may involve more accounting disclosures and financial information, potentially useful for lenders, investors and other stakeholders.
- Corporation Tax: the company may still need a Company Tax Return and supporting accounts/computations prepared to HMRC requirements, even when its public accounts are abbreviated.
A lender or prospective investor might require fuller financial information than the minimum publicly filed accounts. Ask what reports will be available before choosing the simplified format purely for confidentiality.
Important future change: Companies House profit and loss filing
Companies House says that from 1 April 2028, a micro-entity will need to prepare and deliver a copy of its profit and loss account, with an option not to publish it on the public register. Rules and implementation dates can change, so check the official guidance before your company’s relevant filing. See the official accounts guidance.
How to prepare and file micro-entity accounts
- Confirm eligibility. Check the correct financial period, two-out-of-three thresholds, group position and exclusions.
- Reconcile the accounting records. Complete bank, creditor, debtor, director-loan, fixed-asset and tax reconciliations.
- Prepare accounts under the applicable standard. Decide whether FRS 105 is appropriate; review the balance sheet and required statutory statements.
- Approve and file. Obtain the necessary director approval and file by the Companies House deadline using an accepted filing route.
- Complete the tax work separately. Prepare the Corporation Tax computation and Company Tax Return as applicable and monitor the separate HMRC payment deadline.
When a fuller set of accounts may be better
Even when eligible, consider whether simpler public reporting will meet the needs of finance providers, grant assessors, shareholders or a prospective buyer. If the company has complicated assets, external finance, group transactions or imminent fundraising, agree the reporting basis with your accountant before filing.
Micro-entity accounts checklist
Before speaking to an accountant, prepare your accounting-period dates, current and prior-year turnover, balance sheet totals, employee averages, group ownership information, prior filed accounts, bookkeeping access and any lender reporting requirements. Our small-business accounting team can help assess the appropriate accounts and tax filings; book a call to discuss your company’s circumstances. This is general guidance rather than a determination that any particular company qualifies.
