Last updated: 14 October 2026 · Written by Axel
Micro-entity accounts are the simplest annual accounts a UK limited company can prepare. If your company meets two of three tests (turnover of £1 million or less, a balance sheet total of £500,000 or less, and 10 or fewer employees on average), you can send Companies House a short balance sheet and a couple of notes, with no profit and loss account on the public record. Those limits went up for accounting periods starting on or after 6 April 2025, so more small companies qualify than before. HMRC still wants the full picture with your CT600, though, and that is the part people forget.
Most one-van trades, freelancers and small shops sit well inside the limits. Here's how the tests work, who is shut out regardless of size, and what you actually file.
The three tests and the 2 of 3 rule
Your company is a micro-entity if it meets at least two of these conditions. The figures come from section 384A of the Companies Act 2006 and Companies House's Life of a company guidance:
| Test | Periods starting on or after 6 April 2025 | Periods starting before 6 April 2025 |
|---|---|---|
| Turnover | £1 million or less | £632,000 or less |
| Balance sheet total | £500,000 or less | £316,000 or less |
| Employees (average) | 10 or fewer | 10 or fewer |
Details that trip people up:
- Balance sheet total means total assets, not net assets. It is everything the company owns added up (van, tools, stock, money owed to you, cash at bank) before you take off what it owes. A company with a £450,000 property and a £400,000 mortgage has a balance sheet total of at least £450,000, not £50,000.
- Employees are averaged by month. Count the people employed under a contract of service each month, add the monthly totals and divide by the number of months in the year.
- Short or long years scale the turnover limit. If your financial year isn't exactly 12 months, the £1 million figure is adjusted proportionately.
- Two of three is enough. A company turning over £1.2 million with £200,000 of assets and four staff still qualifies, because it passes the asset and staff tests.
When the new limits kick in
The higher figures apply to periods beginning on or after 6 April 2025. If your year runs 1 January to 31 December, your 2025 accounts are still judged on the old £632,000 and £316,000 limits, and the new ones first apply to the year starting 1 January 2026. If your year started on or after 6 April 2025, the new limits apply now.
The two-year rule
In your company's first financial year you qualify if you meet the conditions in that year. After that, your status only changes if you cross the line two years in a row. One unusually big year doesn't knock you out of micro-entity status, and one quiet year doesn't put you into it.
Who is excluded, whatever their size
Size isn't the only test. Companies House lists companies that can't use the micro-entity regime if they are, or were at any time in the financial year:
- a public limited company (plc)
- an overseas company or an unregistered company
- a charitable company
- a company authorised to register under section 1040 of the Companies Act 2006
- a company excluded under section 384 or 384B of the Act
- a parent company of a group that isn't a small group, or of a small group that prepares consolidated accounts
- a subsidiary whose accounts are included in consolidated group accounts
For an ordinary private company owned by its directors, none of these apply. Groups are where it gets messy: a parent company only qualifies if the whole group it heads qualifies as small. If you have a holding company sitting above a trading company, that is a job for an accountant, not a weekend with software.
What you actually file with micro-entity accounts
Every company prepares one set of statutory accounts each year. For a micro-entity, that set is short:
- A balance sheet in one of the formats the regulations allow. It must include the statement "The accounts have been prepared in accordance with the micro-entity provisions and delivered in accordance with the small companies regime", placed above the director's signature and printed name.
- A profit and loss account in the specified format. You prepare it for your shareholders, but at the moment you don't have to send it to Companies House.
- A few notes. The micro-entity rules strip almost all of the usual notes away. What's left is mainly the total of any financial commitments, guarantees and contingencies that aren't on the balance sheet, with pension commitments shown separately.
- No directors' report at Companies House, and no audit if the company can claim the small company audit exemption.
So what goes on the public register is, in practice, a one-page balance sheet and a short footnote. Nobody can see your turnover, your profit or what you paid yourself.
The deadline at Companies House is 9 months after your accounting reference date for a private company. First accounts get longer if your first period is more than 12 months: 21 months from incorporation, or 3 months from the accounting reference date if that's later. Miss it and Companies House fines start at £150 and climb to £1,500 for accounts more than 6 months late. Our late filing penalties guide has the full scale and how appeals work.
HMRC still needs the full set and your CT600
This is the bit that catches people out. Filing a micro-entity balance sheet at Companies House doesn't tell HMRC anything about your tax. For your Company Tax Return, HMRC's guidance on choosing software lists three things you need to be able to file:
- the CT600 return itself
- a Corporation Tax computation, because your profit for Corporation Tax is different from the profit in your accounts
- your company accounts, the full statutory set
GOV.UK is clear that small companies and micro-entities must still send statutory accounts to HMRC as part of their Company Tax Return, even when Companies House gets the simpler version.
The CT600 is due 12 months after the end of the accounting period, and the tax itself is usually due 9 months and 1 day after the period ends, which is earlier than the return. HMRC's own free online filing service closed on 31 March 2026, so both the accounts and the return you send HMRC now go through commercial software.
So a typical micro company files twice a year: the short accounts to Companies House (public), and the CT600, computation and full accounts to HMRC (private). Two bodies, two deadlines, two sets of penalties.
Micro-entity vs filleted accounts
People use these interchangeably, and they aren't the same.
| Micro-entity | Filleted small company | |
|---|---|---|
| Who can use them | Companies meeting 2 of the micro tests | Companies meeting the small company tests |
| Notes | A handful | The fuller small company set |
| Profit and loss at Companies House | Not filed (until April 2028) | Left off the filed copy |
| Effort | Lowest | More |
Filleting is a filing choice for small companies: prepare the full small company accounts, then leave the profit and loss account and directors' report off the Companies House copy. The micro format is simpler from the start. If you qualify, I can't think of a good reason for a straightforward owner-managed company to do the extra work of full small company accounts. Our filleted accounts guide covers that route in more detail.
One change on the horizon: from 1 April 2028, micro-entities will have to send their profit and loss account to Companies House, with an option to opt out of having it published on the public register. Nothing changes for accounts filed before then.
Can you do it without an accountant?
For a lot of micro companies, honestly, yes. With one or two directors, a bank account, a van, some tools and a few invoices owed, the accounts are not complicated. The hard part is the bookkeeping during the year, not the filing at the end. If your records are tidy, software can turn them into a balance sheet, a profit and loss account, a tax computation and a CT600 without you needing to know the formats.
If your company didn't trade at all during the year, the filing is even lighter, and our dormant company accounts guide explains what's left to do.
You'll want an accountant if:
- you're borderline on the tests, especially with the two-year rule in play, and a wrong call would mean the wrong type of accounts
- you're in a group, whether as a parent with subsidiaries or a subsidiary of another company
- your tax affairs are unusual: property held in the company, share schemes, research and development claims, losses carried across years, or a director's loan account you're unsure how to treat
- HMRC has opened an enquiry or you've had a letter you don't understand
Paying an accountant for those cases is money well spent. Paying one every year for a straightforward micro company with clean records often isn't.
Quick answers
Frequently Asked Questions
01What are micro-entity accounts?
They're the simplest form of statutory accounts for very small UK companies. You prepare a short balance sheet, a basic profit and loss account and a few notes, and only the balance sheet and notes go to Companies House.
02What is the micro-entity accounts threshold in 2026?
For accounting periods starting on or after 6 April 2025, you need to meet two of: turnover of £1 million or less, a balance sheet total of £500,000 or less, and 10 or fewer employees on average. Periods that started before that date use the old limits of £632,000 and £316,000.
03Do micro-entities file a profit and loss account?
Not with Companies House, for now. You still prepare one, and it goes to HMRC with your CT600. From 1 April 2028 micro-entities will have to file it at Companies House too, with an option to keep it off the public register.
04Can a holding company be a micro-entity?
Only if the group it heads qualifies as a small group and it doesn't prepare consolidated accounts. Subsidiaries included in consolidated group accounts can't use the micro regime. Group structures are worth an accountant's check.
05Do I still need to file a CT600 as a micro-entity?
Yes. Companies House and HMRC are separate. HMRC needs the CT600, a tax computation and your accounts, due 12 months after your accounting period ends.
File both in one go
If your company is a straightforward micro-entity, A.X.E.L Filing prepares your micro-entity accounts and your CT600 and submits them direct to Companies House and HMRC using your own Government Gateway login. It's £49 for both; dormant companies are £20 and amendments £29. It's software, not an accountant, so if you're borderline, in a group or have unusual tax affairs, get proper advice first. For everyone else, see how A.X.E.L Filing works.
A.X.E.L Filing
Accounts and CT600, filed in one sitting.
Prepare your micro-entity accounts and Corporation Tax return together, then file them to Companies House and HMRC yourself. No accountant fees, no subscription.
£20 for a dormant company
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