Micro-entity accounts are the simplest annual accounts a UK limited company can file at Companies House. For accounting periods starting on or after 6 April 2025, a company qualifies if it meets at least 2 of 3 conditions: turnover of no more than £1 million, a balance sheet total of no more than £500,000, and no more than 10 employees on average.
If you run a small limited company, there's a good chance you qualify, and more companies do now that the thresholds have gone up. This guide uses the Companies House accounts guidance as it reads in October 2026.
The thresholds, old and new
| Condition | Periods starting on or after 6 April 2025 | Periods starting 30 Sep 2013 to 5 Apr 2025 |
|---|---|---|
| Annual turnover | No more than £1 million | No more than £632,000 |
| Balance sheet total | No more than £500,000 | No more than £316,000 |
| Average employees | No more than 10 | No more than 10 |
You only need to meet 2 of the 3. The balance sheet total means fixed assets plus current assets. So a company that's grown past 10 staff can still be a micro-entity if it's under both the turnover and the balance sheet limits. It's the 2 of 3 test that counts, not any single figure.
The two-year rule most people miss
In its first financial year, a company qualifies if it meets the conditions in that year. After that, it must meet them in the current year and the year before. The helpful part's the other direction: if a company qualified one year but misses the conditions the next, it can keep claiming the exemptions for that next year. It only drops out if it misses them two years running.
Micro-entity, small or dormant?
Companies House sorts companies into small, medium and large for accounts, with micro-entity as a sub-classification of small for very small companies. Anything that doesn't meet the micro, small or medium criteria is large and must prepare and submit full accounts. Small companies and micro-entities can both file without the profit and loss account. And if your company qualifies as dormant, what you must deliver shrinks further still, so it's worth checking which bucket you're in before you prepare anything.
Who can't use micro-entity accounts
- public limited companies
- charitable companies
- overseas and unregistered companies
- 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
- companies excluded under sections 384 or 384B of the Companies Act 2006
Some of these rules apply if the company was in that category at any time during the financial year, not only at the year end.
What micro-entity accounts contain
A micro-entity prepares a balance sheet in one of the specified formats, with less detail than a small company would show. It also gets the small company exemptions, including exemption from audit and from filing a directors' report or profit and loss account at Companies House.
The balance sheet must carry a statement that the accounts have been prepared in accordance with the micro-entity provisions and delivered under the small companies regime. Companies House says it must sit in a prominent position above the director's signature and printed name, and appear in the original accounts too, not only the copy sent for filing. Micro-entities still send accounts to their members.
Deadlines and penalties
A private company normally has 9 months from its accounting reference date to file. First accounts covering more than 12 months are due within 21 months of incorporation. HMRC deadlines for your Corporation Tax return are separate, though you may be able to send both at the same time.
| How late | Private company penalty as of October 2026 |
|---|---|
| Not more than 1 month | £150 |
| More than 1 month, up to 3 months | £375 |
| More than 3 months, up to 6 months | £750 |
| More than 6 months | £1,500 |
The penalty doubles if your accounts are late 2 years in a row. Failing to deliver accounts is also a criminal offence, and a company that stops filing can be struck off.
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How to file, and what's changing
- Check your company qualifies for this year and, after the first year, last year too.
- Prepare the balance sheet in a specified micro-entity format with the required statement above the director's signature.
- Send the accounts to your members.
- File with Companies House using its online service or commercial software before your deadline.
Two changes are coming. From 1 April 2028, if you currently use WebFiling, you'll need commercial software to file accounts. Separately, the government has paused the plan to make small companies and micro-entities file a profit and loss account from April 2028 while it looks at simpler options. So, for now, the balance-sheet-only filing stays.
My verdict
If your company sits under two of the three thresholds, micro-entity accounts are usually the right call: there's less to prepare, less that's made public and you won't need an audit. The trade-off is that the public filing shows very little, which can matter if a lender or big customer checks your accounts on the register. Check eligibility every year with the two-year rule in mind, and if your company isn't trading at all, my dormant company guide covers the even lighter option.
Frequently asked questions
What are the micro-entity thresholds in 2026?
For accounting periods starting on or after 6 April 2025, a company must meet at least 2 of these: turnover of no more than £1 million, a balance sheet total of no more than £500,000, and no more than 10 employees on average.
Do micro-entities have to file a profit and loss account?
No. Micro-entities can file at Companies House without a profit and loss account or directors' report. The government has also paused the plan to require small companies and micro-entities to file one from April 2028.
When are micro-entity accounts due?
A private company normally has 9 months from its accounting reference date. First accounts covering more than 12 months are due within 21 months of incorporation.
What is the penalty for filing late?
As of October 2026, a private company pays £150 if accounts are up to 1 month late, rising to £375, £750 and £1,500, and the penalty doubles if accounts are late 2 years in a row.
Can a charity file micro-entity accounts?
No. Charitable companies are among the companies that can't prepare and submit micro-entity accounts.
