Last reviewed: 22 October 2026
If you run a very small business in the UK, you need to understand how to prepare micro entity accounts to stay compliant and avoid unnecessary stress. Most business owners assume that accounts are only required for larger companies. However, micro businesses must prepare annual figures accurately and submit them on time. This is where micro entity accounts preparation becomes important.
Additionally, if you are preparing annual accounts for micro businesses, you need to follow certain rules. These include recording income and expenses, and filing with Companies House and HMRC.
This article guides you on how to prepare micro entity accounts, what information you need, and how to approach the filing process.
Not sure where to start? Our Micro Entity Accounts service handles everything for you, accurately and on time.
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What Is a Micro Entity?
In the UK, a company qualifies as a micro entity if it meets at least two of the following three criteria.
- Its annual turnover must not exceed £1 million.
- Its balance sheet total must not be more than £500,000.
- It should not have more than 10 employees on average.
So, if your company meets the above criteria, it can qualify as a micro-entity in 2026.
What Are Micro-Entity Accounts UK?
Before we discuss how to prepare micro entity accounts, let’s talk about what micro-entity accounts are.
Micro-entity accounts are simplified statements, particularly designed for small businesses in the UK. If your company meets specific criteria for micro-entity accounts, then you can take advantage of reduced filing requirements and streamlined reporting of micro-entity accounts.
If you are wondering whether your small business needs a payroll, read our guide on payroll for small businesses in the UK.
Who Can Prepare Micro Entity Accounts?
When preparing micro entity accounts, it is important to understand who can prepare them. Company directors themselves or an accountant can prepare micro-entity accounts.
The Directors
Company directors are legally responsible for preparing accounts and complying with the applicable accounting requirements. Typically, eligible companies using the micro-entities regime prepare their accounts under FRS 105.
If you want to learn more about the company director’s responsibilities, read our blog on the Main Responsibilities of a Micro Entity Company Director.
Accountants
A qualified accountant can help prepare the accounts, support the filing process, and check compliance.
An accountant who specialises in UK small company accounts is highly preferred, especially due to the complexity of the UK rules.
What Do Micro-Entity Accounts Include?
Micro-entity accounts must comply with the relevant statutory and accounting requirements. The main components include:
- Balance sheet
- Profit and loss account
- Notes to the accounts
- Director approval and signature
How To Prepare Micro Entity Accounts?
The process of micro entity accounts preparation involves the following steps:
Step 1: Check Eligibility
As mentioned above, confirm whether the company meets the micro entity accounts criteria. They must meet two out of the three above-mentioned requirements.
Step 2: Prepare Your Financial Records
Collect all the relevant documentation, including bank statements, invoices, and receipts. Also, record income, expenses, assets, and liabilities accurately.
Account for fixed assets using the applicable FRS 105 rules, including depreciation and impairment where required.
Step 3: Prepare Your Accounts
- Balance Sheet: It is the core document that shows assets, liabilities, and capital. It must include the required statements and be signed by a director.
- Profit and Loss (P&L): Shows the company’s income, expenses, and profit or loss. It must be prepared even if it is omitted from the current Companies House filing.
- Notes to the accounts: Include the disclosures required for the company’s circumstances under the applicable rules.
Step 4: Get Director Approval And Sign
Make sure the directors review and sign the balance sheet. A digital signature may also be used.
Step 5: File With Companies House
- Check the current Companies House filing options and use the appropriate service or software.
- Submit accounts that meet the micro-entity filing requirements.
- A private company’s accounts are usually due within nine months of its accounting reference date, subject to exceptions.
Step 6: File Corporation Tax Return (HMRC)
- This is separate from Companies House.
- File your CT600 (Corporation Tax Return) with HMRC.
- Pay Corporation Tax within 9 months and 1 day after the end of your accounting period.
If you are struggling to prepare micro-entity accounts, let our experts take care of the entire process. Get your micro entity accounts prepared and filed now!
Companies House vs HMRC: What Is the Difference?
Now that you know how to prepare micro entity accounts, let’s distinguish between preparing accounts, filing accounts with Companies House, and submitting accounts to HMRC with the Company Tax Return.
Keep in mind that filing accounts with Companies House and submitting a Company Tax Return to HMRC are separate obligations. Look at the table below for a quick comparison:
| Requirement | Companies House | HMRC |
| Main purpose | Meet company reporting obligations | Report taxable profits and calculate Corporation Tax |
| Information required | Accounts in the format required for the company | Company Tax Return, including the required accounts and tax computations |
| Typical deadline | 9 months after the financial year-end for a private limited company | Company tax return due 12 months after the end of the accounting period. |
| Corporation Tax payment | Not paid through the account filing process | Usually due 9 months and 1 day after the end of the accounting period for a company with a standard accounting period, subject to applicable rules. |
Remember that the deadlines can differ. Therefore, filing accounts with Companies House does not automatically complete the company’s HMRC obligations.
Moreover, you should check whether your company has a different first-accounts deadline or any other circumstances that affect the filing timetable.
For further information, see GOV.UK guidance on preparing annual accounts.
Do I Still Need to File a Corporation Tax Return?
Yes, a UK company may need to submit a Company Tax Return to HMRC even if it qualifies as a micro-entity and files simplified accounts with Companies House. The requirements depend on the company’s circumstances and Corporation Tax position.
What Are the Common Mistakes to Avoid When Preparing Micro Entity Accounts
Here are some common mistakes to avoid when preparing your micro-entity accounts:
- Using outdated thresholds or failing annual checks.
- Forgetting the director sign-off or the required micro-entity statement on the balance sheet.
- Submitting full accounts instead of simplified ones or filing incorrect abridged accounts.
- Missing deadlines leads to automatic fines.
- Errors in figures, missing balance sheet dates, or unbalanced statements.
- Basic records are still required for HMRC.
Which Companies Are Prohibited from Preparing and Filing Micro-Entity Accounts?
Companies that do not qualify to prepare and file micro-entity accounts are:
Charitable Companies
Companies registered as charities have different reporting requirements.
Public Limited Companies
Entities that offer shares to the public cannot use these simplified accounts.
Certain Regulated and Financial Entities
Certain financial institutions, including authorised insurance companies, banks, and specified investment firms, are excluded from the relevant simplified reporting regimes.
How MicroEntityAccounts Can Help?
If you lack accounting experience and want to save time, then you should definitely get professional advice.
Micro Entity Accounts can help you with micro-entity accounts preparation and filing support. This can help you focus on running your business while keeping your reporting responsibilities in view.
Contact us to discuss your requirements.
Additionally, if you need other accounting services or detailed guides, visit our sitemap.
From Paperwork to Peace of Mind – Trust Micro Entity Accounts.
The Bottom Line
Knowing how to prepare micro entity accounts is essential for staying compliant and stress-free. Proper micro entity accounts preparation ensures your figures are accurate and submitted on time.
Check that your company qualifies for the micro-entity regime and understand the separate Companies House and HMRC requirements. Also, keep track of upcoming changes to filing rules.
Disclaimer: The content provided on Micro-Entity Accounts, including our blog and articles, is for general informational purposes only and does not constitute financial, accounting, or legal advice.
