The size categories
| Category (2+ of) | Turnover | Balance sheet | Employees |
|---|---|---|---|
| Micro-entity | ≤ £1m | ≤ £500k | ≤ 10 |
| Small | ≤ £15m | ≤ £7.5m | ≤ 50 |
Thresholds are for financial years beginning on or after 6 April 2025. You normally need to meet the test for two consecutive years to move between categories.
Which accounting standard applies
- FRS 105 — the micro-entities standard: the simplest accounts, minimal notes, no directors’ report, and a legal presumption of a true and fair view
- FRS 102 Section 1A — the small companies regime: reduced disclosures, but more than micro; used by small companies above the micro thresholds
Audit exemption
Most small and micro companies are exempt from audit, which saves real money. The exemption applies if the company qualifies as small, unless shareholders with 10%+ request an audit or the company is in an excluded category. The balance sheet must carry the required audit-exemption statements — a detail DIY accounts often get wrong.
Filleted accounts and what's public
Small and micro companies can file filleted accounts at Companies House — usually just the balance sheet and notes, keeping the profit and loss account off the public register. HMRC still receives full accounts with the tax return. Note: Companies House reforms are set to require small and micro companies to file their profit and loss account in future, so check the current position each year.
Deadlines and penalties (unchanged by size)
Being small changes the format, not the obligations: accounts are due 9 months after year end, a CT600 goes to HMRC, and late filing penalties from £150 to £1,500 apply regardless. We prepare small and micro company accounts and the Corporation Tax return together for a fixed £399 + VAT. Call 0114 327 1480.