What are Micro Entity Accounts?

If you run a small limited company in the UK, you may be eligible to file micro-entity accounts. These are a simplified version of statutory accounts designed to reduce the administrative burden on very small businesses. Filing micro-entity accounts can help you meet your legal obligations while saving time and effort.

Filing micro-entity accounts may seem straightforward, but ensuring they are prepared correctly and meet Companies House requirements still takes care and attention. Our limited company accountants work closely with small business owners to prepare accurate accounts using the micro-entity format where eligible. We make sure your balance sheet is complete, your deadlines are met, and all supporting notes are included to keep your company compliant. Whether you are preparing your first set of accounts or simply want a professional to handle the paperwork, we are here to help.

In this article, we explain what micro-entity accounts are, who qualifies, what they include and how they differ from standard company accounts.

What Are Micro-Entity Accounts?

Micro-entity accounts are the most basic form of annual accounts that a UK company can file with Companies House. They are intended for very small businesses that meet specific size criteria. Companies that qualify can use simpler formats, submit fewer details and avoid preparing full financial statements such as a profit and loss account.

These accounts still meet the legal requirements set out in the Companies Act but require less disclosure and are easier to prepare.

Who Can Use Micro-Entity Accounts?

To qualify as a micro-entity, your company must meet at least two of the following conditions:

• Turnover of £632,000 or less

• £316,000 or less on the balance sheet

• Ten employees or fewer

These conditions must apply for two consecutive financial years. Your company must also be a private limited company and not part of a group that files consolidated accounts.

Certain types of companies cannot use micro-entity accounts. These include public limited companies, charities, investment firms and companies preparing accounts for group consolidation.

What Do Micro-Entity Accounts Include?

Micro-entity accounts typically consist of:

• A balance sheet

• A footnote confirming that the accounts have been prepared under the micro-entity provisions

• A simplified set of notes to the accounts

They do not include:

• A profit and loss account

• A director’s report

• A full set of explanatory notes

Companies House will publish only the balance sheet. The reduced information gives small companies more privacy while still meeting legal reporting obligations.

Read more about how to read companies house accounts.

What Are the Benefits?

There are several advantages to using micro-entity accounts:

• Easier to prepare than full accounts

• Reduced reporting requirements

• Less financial detail made public

• Cheaper to produce, especially for sole directors or owner-managed businesses

Using micro-entity provisions helps small companies stay compliant without the complexity of full statutory reporting.

What Are the Limitations?

Although micro-entity accounts are simpler, they may not meet the requirements of:

• Banks and lenders who request detailed financials

• Investors who want to assess your financial performance

• Suppliers who use financial data for credit checks

If your business needs external funding or wishes to present a more complete financial picture, you may still choose to prepare small company or full accounts voluntarily.

How to File Micro-Entity Accounts

You can file micro-entity accounts online using Companies House WebFiling. You will need your company authentication code and Companies House registration number. You can also file through accounting software or with help from an accountant.

Before submitting, you should:

• Confirm your company meets the eligibility criteria

• Ensure all relevant deadlines are met

• Prepare a balance sheet that accurately reflects your financial position

• Include the required micro-entity footnote in the accounts

Late filing penalties still apply even if you use the simplified format.

Final Thoughts

Micro-entity accounts are an effective way for the smallest UK companies to stay compliant while reducing paperwork. If your business qualifies and does not need to publish detailed financial information, using this format can save time and cost. However, it is important to understand the limits and ensure that the simplified accounts still reflect your company’s true financial position.

For sole directors and very small businesses, micro-entity accounts offer a simpler way to meet annual reporting obligations. But even simplified accounts can cause confusion if you are unsure what to include or how to report changes. Our small company accountant service is designed to support micro-businesses with clear, practical advice and hands-on help with filing. We will confirm your eligibility, prepare the accounts correctly, and submit them to Companies House on your behalf so you can focus on running your business with confidence.

If you are unsure whether you qualify or need help preparing your annual accounts, a professional accountant can help guide you through the process and ensure your filing is accurate and complete.

If you are looking for more guidance on maintaining your company’s records, filing obligations or understanding how Companies House works, our Companies House Help page is the place to start. It brings together all our in-depth articles on topics such as confirmation statements, registered office changes, PSC reporting, company strike off and more. Whether you are new to running a company or just want clear answers without the jargon, our help centre provides practical support to keep your business compliant and informed year round.

You might also be interested in how to file a confirmation statement.