Cross a certain size and Companies House stops letting you file the simplest version of your accounts — but “cross a certain size” is doing a lot of work in that sentence, and the rules for exactly where that line sits catch out a fair number of growing companies. Here’s how to tell which regime your company actually qualifies for, and why some companies that qualify for micro-entity accounts choose not to use them.
The size thresholds, in full
Both regimes work the same way: you need to meet at least two of three conditions to qualify. For accounting periods beginning on or after 6 April 2025, the thresholds are:
Micro-entity (FRS 105)
- Turnover: £1 million or less
- Balance sheet total: £500,000 or less
- Employees: 10 or fewer
Small company (FRS 102 Section 1A)
- Turnover: £15 million or less
- Balance sheet total: £7.5 million or less
- Employees: 50 or fewer
Both thresholds rose substantially in April 2025 — the micro-entity turnover limit alone went up from £632,000 to £1 million — so if you last checked where you stood before then, it’s worth checking again. Some companies that were previously “small” now qualify as “micro.”
What actually changes between the two
Micro-entity accounts under FRS 105 are deliberately stripped back:
- Only a simplified balance sheet is filed publicly — no profit and loss account is made visible on the public register
- Notes to the accounts are minimal — just accounting policies and any guarantees
- No directors’ report is required
- No option to revalue assets — everything is recorded at cost less depreciation, even if the market value has moved significantly
Small company accounts under FRS 102 Section 1A allow more detail and more flexibility, including the option to revalue certain assets like property, but the trade-off is more disclosure and more preparation work. You can also choose to file “filleted” accounts — leaving out the profit and loss account and directors’ report from the public filing even though your company technically qualifies as small rather than micro.
Do you have to use micro-entity accounts if you qualify?
No — qualifying for the micro-entity regime gives you the option, not an obligation. Some directors deliberately choose the fuller FRS 102 Section 1A format even when they qualify as a micro-entity, usually for one of these reasons:
- A lender or investor wants more detail than a bare-bones balance sheet provides, particularly if you’re seeking finance
- You own property or other assets that have appreciated significantly, and you want that reflected in the accounts rather than shown at historic cost
- You want fuller records for your own management purposes, even if what goes to Companies House stays minimal
The two-year buffer
Your company doesn’t flip between regimes the moment it crosses a threshold in either direction. You generally need to exceed (or fall below) the limits for two consecutive financial years before your classification changes — one unusually strong year won’t force you out of the micro-entity regime, and one weak year won’t move a small company down either. The exception is a brand-new company, which only needs to meet the conditions in its first year to qualify.
Which one should you file?
For most single-director companies with straightforward finances and no plans to seek external investment, micro-entity accounts under FRS 105 are the simpler, lower-cost, faster option — we’ve covered the practical filing process in our guide on how to file micro-entity accounts. If you’re carrying property, planning to approach lenders, or want your accounts to show a fuller financial picture, FRS 102 Section 1A is worth the extra disclosure.
If you’re not sure which category your company falls into, or want help deciding which format actually serves your business rather than just ticks the compliance box, our accounts filing service can walk through your numbers and file the right version for you.
