A micro entity accounts template is a simplified balance sheet document that the smallest UK limited companies use to meet their annual filing obligations under FRS 105. It contains a condensed balance sheet, a short set of notes, and a directors’ statement confirming the accounts have been approved. This is what gets filed with Companies House. A fuller version — including a profit and loss account — is prepared separately and submitted to HMRC as part of the Corporation Tax return. This guide explains what the template must include, who can use it, how to create one, and exactly where each document needs to go.
Who Qualifies for Micro Entity Accounts?
Not every limited company can use the micro-entity accounts regime. To qualify, your company must meet at least two out of the following three conditions for two consecutive financial years:
| Criterion | Current Threshold (2026–27) | What It Covers |
|---|---|---|
| Turnover | No more than £1M | Total income in the financial year |
| Balance sheet total | No more than £500,000 | Total assets before deducting liabilities |
| Employees | No more than 10 | Average number during the financial year |
Source: Companies House — micro-entity eligibility thresholds (Companies Act 2006 as amended)
If you are a brand new company filing your first set of accounts, you only need to meet the conditions for that single year. The two-consecutive-year rule applies when you have been trading for more than one accounting period.
Applying the micro-entity regime is optional. If you qualify but would rather prepare more detailed accounts — for example because investors or lenders want to see a full profit and loss account — you can choose to file under the small company regime using FRS 102 instead.
Which Companies Cannot Use the Micro-Entity Regime?
Even if your company meets the size thresholds, certain types of company are excluded from FRS 105 entirely:
- Companies that are part of a group and required to prepare group accounts
- Charities
- Public companies (PLCs)
- Companies regulated under the Financial Services and Markets Act 2000
- LLPs or qualifying partnerships that are excluded from the small companies regime
If any of these apply to your business, you will need to file accounts under a different standard even if your turnover and balance sheet are well within the micro-entity limits.
What Do Micro Entity Accounts Look Like?
Micro entity accounts are deliberately stripped back. Unlike the accounts prepared by larger companies, they do not include a profit and loss account, a directors’ report, or detailed notes. What they do include, under FRS 105, is:
- A simplified balance sheet
- A small number of mandatory notes to the accounts
- A statement that the accounts have been prepared under the micro-entity provisions of the Companies Act 2006
- A directors’ signature approving the accounts
The balance sheet is the core of the template. It shows what the company owns and what it owes at the end of the financial year, expressed as a single net figure. It does not show trading activity, revenue, or how the profit was generated — that information stays in the profit and loss account, which goes to HMRC but does not appear on the public Companies House record.
This is one of the main reasons micro-entity status is attractive for small business owners: the level of financial detail visible to the public is very limited. Anyone looking at your Companies House filing sees only the balance sheet snapshot, not how much money your company made or spent during the year.
Under FRS 105, there is no option to revalue assets to fair value. Everything is measured at historical cost — what you originally paid — less accumulated depreciation. This keeps the accounting straightforward but it does mean the balance sheet may not reflect current market values for assets like property or equipment.
How to Create a Micro Entity Accounts Template: What Each Section Must Include
Here is a breakdown of the standard balance sheet sections in a micro entity accounts template and what each one contains:
| Section | What Goes Here | Example Line Items |
|---|---|---|
| Fixed Assets | Long-term assets your company owns | Computer equipment, furniture, vehicles, intangibles |
| Current Assets | Short-term assets expected within 12 months | Cash, debtors, stock, short-term investments |
| Creditors (< 1 year) | Amounts owed and payable within 12 months | Trade creditors, VAT owed, PAYE, short-term loans |
| Net Current Assets | Current assets minus current creditors | Calculated figure — no direct entries |
| Creditors (> 1 year) | Long-term liabilities | Director loans, bank loans over 12 months |
| Net Assets | Total assets minus all liabilities | Calculated figure — must equal capital and reserves |
| Capital and Reserves | Funding that belongs to the shareholders | Share capital, profit and loss reserve |
These sections follow a fixed order under FRS 105. You cannot rearrange them or combine line items in a way that obscures the individual categories. The numbers in the template flow directly from your bookkeeping records — which is why accurate record-keeping throughout the year makes producing the accounts significantly faster.
What Notes Must Be Included?
The notes to the accounts in a micro entity template are minimal but they are mandatory. Under FRS 105, the required disclosures include:
- Advances and credits to directors: Any loans or credit arrangements between the company and its directors must be disclosed, including the amount, any interest rate, and the main conditions.
- Financial commitments, guarantees and contingencies: If the company has made any guarantees or has future financial commitments not shown on the balance sheet, these must be noted.
- Events after the balance sheet date: Any significant events that occurred after the year end but before the accounts were signed — such as a major contract won or lost — should be noted if they affect how the accounts are understood.
These notes do not need to be lengthy. For most micro entities, each disclosure is one or two sentences. The purpose is to flag anything material that a reader would need to know that the balance sheet alone does not capture.
What is the Directors’ Statement?
At the bottom of the balance sheet, the accounts must include a statement worded something like: ‘For the year ending [date], the company was entitled to exemption from the audit of the accounts under section 477 of the Companies Act 2006 relating to small companies. The members have not required the company to obtain an audit of its accounts under section 476 of the Companies Act 2006.
The director acknowledges their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts. These accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with FRS 105 The Financial Reporting Standard applicable to the Micro-Entities Regime.’
The director then signs the balance sheet, confirms the date, and prints their name. This is a legal requirement — unsigned micro entity accounts will be rejected by Companies House.
The wording of the directors’ statement matters. Companies House will reject accounts that use incorrect or incomplete statutory language. If you are preparing accounts yourself, use software that generates this text automatically or get an accountant to check the wording before filing.
Can You File Micro Entity Accounts With HMRC?
Yes — but what you file with HMRC is not the same as what goes to Companies House. This is one of the most misunderstood aspects of micro-entity accounts, and getting it wrong can create problems with your Corporation Tax return.
| Companies House | HMRC (CT600) | |
|---|---|---|
| What you file | Abbreviated balance sheet + notes + directors’ statement | Full accounts including profit and loss + CT600 |
| Format required | Web filing or software submission | iXBRL format (via accounting software or agent) |
| Deadline | 9 months after accounting reference date | 12 months after accounting period end |
| Profit and loss required? | No — not publicly filed | Yes — must be submitted with CT600 |
| Directors’ report required? | No — exempt under FRS 105 | No — not required |
| Penalty for late filing | £150 after 1 month, rising to £1,500 after 6 months | Automatic £100 penalty, rising with further delays |
The accounts you send to HMRC must be filed in iXBRL format as part of your Corporation Tax return (CT600). iXBRL stands for Inline eXtensible Business Reporting Language — it is a structured digital format that allows HMRC to read and process the financial data automatically.
Most accounting software packages generate iXBRL automatically when you produce your accounts. If you are preparing accounts manually in a Word document or spreadsheet, you will need to convert them into iXBRL before they can be submitted.
The profit and loss account that you do not file publicly at Companies House must be included in the HMRC submission. This is a separate document from the public-facing balance sheet and contains your income, expenses, and net profit or loss for the year.
Many directors of micro entity companies do not realise there are two separate filing requirements — one to Companies House and one to HMRC — with different deadlines, different document requirements, and different penalties for late submission. Missing either deadline can lead to automatic financial penalties.
What Are the Filing Deadlines for Micro Entity Accounts?
There are two separate deadlines to manage:
- Companies House: You must file your micro entity accounts within nine months of your accounting reference date (ARD). For example, if your financial year ends on 31 March 2026, your accounts must reach Companies House by 31 December 2026.
- HMRC (Corporation Tax): You must file your CT600 Corporation Tax return, along with the full accounts in iXBRL format, within 12 months of the end of the accounting period. Any Corporation Tax owed must be paid within nine months and one day of the period end.
For newly incorporated companies, the first accounts deadline at Companies House is 21 months from the date of incorporation rather than nine months. This gives new companies more time to produce their first set of accounts.
Late filing at Companies House triggers automatic penalties: £150 if up to one month late, £375 if between one and three months, £750 if between three and six months, and £1,500 if more than six months late. These penalties double if the accounts are late two years in a row.
How Do You Create a Micro Entity Accounts Template in Practice?
There are three main routes for preparing micro entity accounts, each with different trade-offs in terms of cost, time, and accuracy:
1. Use Accounting Software
This is the most common approach. Software packages such as Xero, QuickBooks, FreeAgent, and Sage all produce balance sheets and full accounts directly from your bookkeeping records. They generate the correct formatting, include the statutory notes and directors’ statement, produce the iXBRL version for HMRC, and often allow you to file directly with Companies House from within the platform.
The advantage is accuracy — the numbers feed through automatically from your transactions, reducing the risk of a manual error on the balance sheet. Most software also prompts you for any missing information before you file.
2. Use a Specialist Filing Service
There are online tools specifically designed for micro entity accounts — some charge as little as £30 to £50 per filing. You input your figures, the service generates the accounts in the correct format and files them on your behalf. These services are particularly useful if you do not use accounting software year-round but want a straightforward and compliant submission at year end.
3. Use an Accountant
For directors who are not confident preparing their own accounts, working with an accountant is the most thorough option. An accountant reviews your bookkeeping, prepares both the Companies House filing and the HMRC submission, checks for any issues with the numbers, and handles both deadlines on your behalf.
This is especially worthwhile if your company has director loans, complex asset depreciation schedules, or if you are unsure whether you qualify for the micro-entity regime for a given year.
How Does Corporation Tax Fit Alongside Your Micro Entity Accounts?
Filing your accounts is only one part of the year-end process. Your company also needs to calculate and pay Corporation Tax on its profits. The current Corporation Tax rates are:
- 19% on profits up to £50,000 (small profits rate)
- 25% on profits over £250,000 (main rate)
- A tapered marginal rate applies on profits between £50,000 and £250,000
These rates apply to the taxable profit shown in your profit and loss account — the same document that goes to HMRC but not to Companies House. This is why the profit and loss account matters even though it is not publicly visible: it is the foundation of your Corporation Tax calculation.
For directors who also draw a salary from the company, the Income Tax rates below apply to personal salary income for the 2026 to 2027 tax year:
| Band | Taxable Income (2026–27) | Tax Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 to £50,270 | 20% |
| Higher Rate | £50,271 to £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
Source: GOV.UK — Income Tax rates and Personal Allowances (tax year 6 April 2026 to 5 April 2027)
The standard Personal Allowance remains £12,570 for 2026 to 2027. Many micro entity directors structure their salary at or near this threshold to minimise personal Income Tax while drawing the remainder of their income as dividends, which are taxed separately at lower rates.
FAQs About Micro Entity Accounts Template
Do I need an accountant to prepare micro entity accounts?
No — there is no legal requirement to use an accountant for micro entity accounts. Directors can prepare and file their own accounts. However, getting it wrong — whether the balance sheet contains errors, the iXBRL format is incorrect, or a deadline is missed — can result in penalties or queries from HMRC. For most directors without an accounting background, the cost of an accountant or specialist filing service is a worthwhile protection against those risks.
Can I use a Word document or Excel spreadsheet as my micro entity accounts template?
You can prepare your accounts in Word or Excel, but you cannot submit them to HMRC in that format. HMRC requires iXBRL, which is a structured digital format that cannot be produced directly from Word or Excel without conversion software. For Companies House, you can file a PDF produced from your document, but the easiest route is to use accounting software or a filing service that produces the correct format automatically.
How long do I need to keep micro entity accounts records?
You must keep all accounting records that support your filed accounts for a minimum of six years from the end of the financial year they relate to. This includes invoices, bank statements, payroll records, and any other documentation that was used to prepare the balance sheet and profit and loss account. HMRC can open an enquiry into your Corporation Tax return at any point within that window.
What happens if my company grows and no longer qualifies as a micro entity?
If your company exceeds two of the three thresholds in two consecutive years, it moves into the small company category and must file accounts under FRS 102 instead of FRS 105 for the following year. FRS 102 accounts include a full profit and loss account, a balance sheet, and more detailed notes — and unlike micro entity accounts, the profit and loss is filed publicly at Companies House.
Final Thoughts
A micro entity accounts template is not complicated once you understand what each section is for. The balance sheet captures your assets and liabilities at the year end. The notes flag anything material that sits outside that snapshot. The directors’ statement confirms the accounts have been properly prepared. That filing goes to Companies House. The fuller version, with profit and loss, goes to HMRC.
The most common mistakes are missing one of the two filing deadlines, forgetting the iXBRL conversion for HMRC, and using incorrect statutory wording in the directors’ statement. Getting those three things right means your filing is complete and compliant.
If you want help preparing your micro entity accounts, checking whether you still qualify for the regime, or managing both the Companies House and HMRC deadlines in one place, the team at Micro Entity Accounts is set up to do exactly that for small business owners across the UK.
Disclaimer: The content on MicroEntityAccounts is for informational purposes only and do not constitute tax or financial advice. We recommend consulting a certified tax professional or the HM Revenue and Customs Dept (HMRC) for accurate guidance. MicroEntityAccounts is not responsible for any decisions made based on the information provided.
