Micro Entity Accounts

To qualify as a micro business, you must meet at least two of these conditions:

• Annual turnover not more than £632,000
• Balance sheet total not more than £316,000
• No more than 10 employees

Under government regulations, micro-entity accounts are exempt from some of the financial reporting requirements of company year-end accounts.

Certain businesses cannot apply to be micro-entities. These are:

• Public limited companies
• Limited Liability Partnerships (LLPs)
• Not-for-profits

A company that is a subsidiary included in a consolidated group’s full statutory accounts cannot qualify as a micro-entity.

A parent company can only submit micro-entity accounts for itself if it qualifies individually as a micro-entity.

Under the Small Companies (Micro Entities’ Accounts) Regulations 2013, companies that qualify as micro-entities are exempt from some financial reporting requirements.

When you prepare and file micro-entity accounts under these regulations, they are a simplified version of full annual company accounts.

Micro-entity accounts are still statutory under the Companies Act. Under these regulations, ALL companies must prepare and file annual accounts, whether these are full or abridged.

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Micro-entity accounts must include:

• Simplified profit and loss account
• Simplified balance sheet

Some micro-entities will also need to include:

• Simplified auditor’s report

You don’t need to submit a director’s report. Many micro-entities are also exempt from being audited. If this exemption applies to you, you won’t need to submit an auditor’s report either.

You will need to prepare simplified versions of:

• Profit and loss account
• Balance sheet

You will also need to prepare and submit a simple version of an auditor’s report UNLESS your company is exempt from auditing.

To be exempt, your company must be classed as small, as well as qualifying for micro-entity status.

A small company must meet at least two out of these three criteria:

• Turnover of £10.2 million or less
• Balance sheet of £5.1 million or less
• 50 employees or under

To complete your micro-entity accounts you do not need to include a director’s report.

We can prepare and file your micro-entity accounts at Companies House for you. We do this electronically, submitting your completed accounts online.

You do not need to prepare and file a director’s report with your micro-entity accounts.

However, before doing your annual accounts you must make sure your company qualifies as a micro-entity.

If you prepare and file micro-entity accounts, these include simplified versions of your profit and loss accounts and balance sheet.

But this isn’t the same as submitting a full set of abridged accounts.

Abridged accounts include:

• Simplified balance sheet with related notes
• Simplified profit and loss accounts
• Director’s report and signature

They don’t include a breakdown of fixed assets, debtors and creditors.

But for micro-entity accounts, you do not need a director’s report and you can prepare your balance sheet and profit and loss account with even less information than what you’d include in an abridged account.

Remember, to file micro-entity accounts, you must meet at least two out of these three criteria:

• Turnover not more than £632,000
• Balance sheet total not more than £316,000
• No more than 10 employees

Eligibility for filing accounts as a micro-entity or small entity differs.

To file simplified, micro-entity accounts your company must meet two of these criteria:

• Turnover not more than £632,000
• Balance sheet total not more than £316,000
• No more than 10 employees

To file abridged, small company accounts your company must meet two of these criteria:

• Turnover not more than £10.2 million
• Balance sheet total not more than £5.1 million
• No more than 50 employees