October 18, 2026

If you run a small limited company in the UK, one of the first decisions you face at year-end is what kind of accounts to file with Companies House: micro entity accounts or small company accounts. Both are legitimate options for smaller businesses, but they differ in how much financial detail you must disclose, what you file, and what they signal to lenders, suppliers and competitors. Here is the short version: micro entity accounts are the simplest filing available — a basic balance sheet with minimal notes and no profit and loss account on the public record. Small company accounts show more, including your profit and loss. Which one you can use comes down to your company’s size against three statutory thresholds. This guide explains the differences, the current thresholds, and which option makes sense for your business. Micro entity vs small company accounts: the key differences at a glance Feature Micro entity accounts Small company accounts Qualifying thresholds (2 of 3) Turnover ≤ £1m; balance sheet ≤ £500,000; ≤ 10 employees Turnover ≤ £15m; balance sheet ≤ £7.5m; ≤ 50 employees What you file at Companies House Simplified balance sheet + minimal notes Balance sheet + notes (P&L can be omitted from the public filing with members’ agreement) Profit and loss on public record No Yes, unless abridged accounts are filed Directors’ report Not required Required (though simplified) Accounting standard FRS 105 FRS 102 Section 1A Audit Exempt in most cases Exempt in most cases Privacy Maximum — turnover and profit hidden Lower — more financial detail is public Best for Very small, simple companies that value privacy Companies that want to show credibility to lenders and partners What are micro entity accounts? Micro entity accounts are simplified financial statements designed for the UK’s smallest limited companies — the “bare minimum” reporting option Companies House allows. If you want the full picture, read our guide on what micro entity accounts are and how they work. When you file micro entity accounts, you submit an abridged balance sheet showing what your company owns (assets) and owes (liabilities) at your financial year-end, plus a small number of mandatory notes. You do not file a profit and loss account, a directors’ report, or detailed notes on the public record. This simplified regime was introduced in December 2013 to cut the administrative burden on Britain’s smallest businesses. It is based on EU-derived accounting rules and remains the least time-consuming filing option if you qualify. What are small company accounts? Small company accounts are a step up in detail and disclosure. Your company must prepare full accounts — balance sheet, profit and loss account, directors’ report and notes — under FRS 102 Section 1A. What you file publicly can be abridged: with the agreement of all members, a small company can omit the profit and loss account from its Companies House filing. The trade-off is transparency. Anyone searching for your company at Companies House can potentially see your turnover, cost of sales and profit figures, giving lenders, suppliers and partners a clearer picture of how the business is performing. Many accountants recommend small company accounts for businesses that want to demonstrate credibility when applying for finance or tendering for contracts. The thresholds: do you qualify as a micro-entity? Eligibility comes down to three statutory tests. Your company qualifies as a micro-entity if it meets at least two of the following — and the figures you use depend on when your accounting period began: Test Micro-entity (periods beginning on/after 6 April 2025) Small company (periods beginning on/after 6 April 2025) Annual turnover £1 million or less £15 million or less Balance sheet total £500,000 or less £7.5 million or less Average employees 10 or fewer 50 or fewer Important: these higher thresholds apply to accounting periods beginning on or after 6 April 2025. For earlier periods, the old limits apply — turnover of £632,000 or less and a balance sheet total of £316,000 or less for micro-entities (the employee test was unchanged). Check which set of rules covers your financial year before you file. For a step-by-step check, see our guide to who qualifies as a micro-entity. Every micro-entity is technically also a small company, but not every small company is a micro-entity. In practice: if your limited company has a turnover of £1.2 million, you are too large to file micro entity accounts, but you still comfortably qualify as a small company. Some companies cannot use the micro-entity regime whatever their size — including public limited companies, LLPs, charities and not-for-profits, banks and insurers, and companies that are part of an ineligible group. If any of these apply, you must file as a small company (or larger). What do you actually have to file? Both regimes share the same Companies House deadline: private limited companies must file within 9 months of their accounting reference date (6 months for public companies). What differs is the content: Micro entity: simplified balance sheet with prescribed line items, plus a handful of mandatory notes (for example, off-balance-sheet arrangements and employee numbers). No P&L, no directors’ report on the public record. Small company: full accounts must be prepared for members and HMRC. The public filing includes the balance sheet and notes; the P&L and directors’ report can be omitted from the public filing (abridged accounts) if all members agree each year. Both micro-entities and small companies are usually exempt from a statutory audit — unless members holding at least 10% of shares demand one, or the company is in an ineligible group. Will HMRC accept micro entity accounts? Yes — but understand that HMRC and Companies House are separate organisations with different requirements. Companies House accepts your simplified micro entity filing as your public record. HMRC, however, needs full statutory accounts — including the profit and loss account — submitted in iXBRL format alongside your Company Tax Return (CT600). So even if you file micro entity accounts publicly, you still prepare a full set of accounts for HMRC.