There’s no getting round the fact that every company or association must file accounts with Companies House, as well as submitting a Company Tax Return to HMRC.

Even if your company makes a loss one year and you don’t have any Corporation Tax to pay, you’ll still need to file your return and accounts as part of your statutory responsibilities.

As a business owner you probably already have a lot on your plate so it might be welcome news that, depending on the size of your company, you could be able to reduce the admin burden and send micro-entity accounts rather than full accounts to Companies House.

What are micro-entity accounts?

One of the reporting requirements for a limited company is that it submits accounts to Companies House each year. These documents are prepared after the end of the company’s financial year and show how it performed over the previous accounting period. This is something you simply can’t get out of, whether you’ve made a profit or loss, or even if your company is dormant.

If you qualify as a ‘micro company’ then you may be able to submit a simpler set of accounts instead, called micro-entity accounts. It has the potential to save you a lot of time and stress, because you won’t need to include so many documents, such as director’s reports.

Is this suitable for me?

Submitting micro-entity accounts could be the right choice if your company consists of yourself and a few members of staff, with no shareholders who need to know the ins and outs of your company’s performance.

 
It’s also worth noting that any business can still submit full accounts if they choose to do so, regardless of their size. In some cases it can be a good habit to get into, especially if you plan on expanding.

Can any company submit micro-entity accounts?

Only very small ‘micro’ companies can submit micro-entity accounts, so if you’re a medium sized or larger business, you’ll have to send off a full set of accounts.

How do I know if I qualify as a micro-company?

Your company will qualify as a micro-entity as long as it meets at least two out of three requirements. These requirements depend on the accounting period you’re dealing with though, so we’ve listed them under separate headings below.

Accounting periods between 30th September 2013 to 5th April 2025

In order for HMRC to classify your limited company as a micro-entity for accounting periods between 30th September 2013 to 5th April 2025, you need to meet two or more of the following criteria:

• You have a turnover of £632,000 or less
• A balance sheet total of £316,000 or less
• 10 employees or less throughout the year

Accounting periods beginning on or after 6th April 2025

For accounting periods which begin on or after 6th April 2025 a company counts as a micro-entity if it meets two or more of these:

• Annual turnover no more than £1 million
• A balance sheet total no more than £500,000
• No more than 10 employees on average

Who can’t submit accounts as a micro-entity?

Unfortunately, there are restrictions on who is able to submit micro-entity accounts to Companies House. You can’t use this method if your company is:

• Not-for-profit
• Public limited company
• Limited liability partnership (LLP)
• Investment undertakings (which look after a collective pool of investor assets)
• Financial institutions (such as banks)
• Subsidiaries of larger parent companies that are accounted for in the group’s accounts

How do I prepare micro-entity accounts?

If you qualify for micro-entity accounts but don’t know what to do, don’t panic! You’ll need to prepare the following:

• A simplified balance sheet with footnotes which is signed by the director, and includes a statement to confirm it was prepared in line with micro-entity provisions
• Abridged profit & loss accounts, starting from the gross profit (the profits you make after deducting costs), rather than the turnover (the amount of sales you make within a time period)
• An auditor’s report (if you’re exempt from auditing, you might still choose to submit a report anyway)
• Micro-entities are exempt from needing to include a director’s report, but again, you can choose to include one if you like

What is the deadline for sending micro-entity accounts?

The due date for submitting accounts to Companies House depends on when the company was incorporated (registered).
 

Are there disadvantages to submitting micro accounts?

They’re so quick and simple to do – and that comes with a price! Because micro-entity accounts contain so little information, it could deter lenders and credit agencies you’re applying to for funding. This is because there will be less publicly available information about your company, so you might need to include more details as part of your funding application. It also makes it much harder for investors to see your company’s progress.

 
Learn more about our online accounting services for limited companies. Call 020 3355 4047 or get an instant online quote.