If you run a small limited company, you have more of a say over your year-end accounts than you might realise.
Depending on your size, you can choose to file the simplest accounts available – micro-entity accounts – or move up to small company accounts, which give a little more away. Both are far lighter than anything a medium or large company has to produce.
But they aren’t the same, and the difference matters more than it first appears.
The choice affects how much of your finances ends up on the public record, what your accounts cost to prepare, and how useful they are to anyone considering lending to you, investing in you, or buying the business.
Here’s what to weigh up before you decide.
Micro-Entity and Small: Where the Line Falls
Both come from the same law, the Companies Act 2006. Your size is judged on your turnover, the total value of what your company owns (the balance sheet total), and how many people you employ. Meet two of the three limits, and you fall into that bracket.
The limits rose for accounting periods starting on or after 6 April 2025 – the first increase since 2013 – and that change alone moved around 113,000 companies down from small into micro-entity. You can find the full figures in the GOV.UK guidance on preparing and filing accounts.
| Measure | Micro-entity | Small company |
|---|---|---|
| Turnover | £1 million or less | £15 million or less |
| Balance sheet total | £500,000 or less | £7.5 million or less |
| Employees | 10 or fewer | 50 or fewer |
The Rules Around the Figures
A few rules decide how those limits are applied, and they’re worth knowing before you assume which bracket you’re in:
- The two-year rule: You normally have to be under the limits for two years running before your status settles, so one unusually big year won’t knock you out on its own.
- The transitional rule: You can treat the new, higher limits as if they’d applied the year before, so you feel the benefit straight away.
- The group rules: If your company is part of a group, you may not be able to use the micro rules at all. It depends on the group’s structure – a company pulled into a parent’s group accounts, for example, can’t use them.
There’s one mix-up worth clearing up. Every micro-entity automatically counts as a small company too. So the real question isn’t whether you’re micro or small. It’s that your company is small enough to use the simplest micro rules, and you’re deciding whether to do that or file the fuller small company accounts instead.
What Sets Them Apart
The two main differences are how much detail you have to show, and one rule about how you value what the company owns.
How Much You Have to Show
Micro-entity accounts are the bare minimum. There’s no directors’ report, only a handful of notes, and a short summary of what you own and owe. They’re quick to prepare and cheap to file, which makes them a good fit for a straightforward, owner-run business.
Small company accounts ask for more – more notes, more detail.
For the technical names, micro-entity accounts follow a rulebook called FRS 105 and small company accounts follow FRS 102. Both are set by the Financial Reporting Council.
How You Value What You Own
Micro-entity accounts do not let you revalue assets or show investment property at today’s market value. Assets are generally recorded at cost, less any depreciation or impairment, so the accounts may not reflect an asset’s current value.
For most businesses, that does not change much. A van, tools or ordinary equipment are usually depreciating assets anyway, so the lack of a revaluation option rarely drives the decision.
Property is where it can matter. If a company bought premises for £200,000 and they are now worth £280,000, FRS 105 micro-entity accounts may still leave the property much closer to its cost-based figure. That can make the balance sheet look weaker than the business really is. Small company accounts under FRS 102 offer more flexibility and, in some cases, allow property to be shown at current value.
That said, property can easily push a company over the £500,000 micro-entity balance sheet limit, so this point mainly matters for companies holding lower-value property, or a share of one, while still meeting the micro-entity size tests.
The Privacy Question – And What’s About to Change
For many directors, the appeal of micro-entity accounts is privacy. They assume micro accounts keep far more information out of public view than small company accounts do.
That is only partly true.
Anything filed at Companies House is publicly available. But under the current rules, neither micro-entity accounts nor filleted small company accounts include the profit and loss account.
A micro-entity files a balance sheet with very limited notes. A small company prepares full statutory accounts, then files a filleted version with Companies House, omitting the profit and loss account and directors’ report.
In both cases, turnover and profit are not publicly available from the Companies House filing.
HMRC is different. The company must still submit full accounts, including the profit and loss account, with its Company Tax Return.
So the privacy gap is not really about turnover or profit. It’s about the level of detail in the balance sheet. Micro-entity accounts disclose very little beyond headline assets, liabilities and capital. Small company accounts usually include fuller notes and more context, even when the profit and loss account is omitted.
That makes micro accounts more private, but not in the way many directors think.
Changes to Company Accounts in April 2028
The plan was to require small companies and micro-entities to publicly disclose their profits from April 2027. After pushback from businesses, accountants and MPs, it was paused in early 2026.
In June 2026, the government settled on how it would proceed. From April 2028, you’ll have to send your profit figures to Companies House – but you’ll be able to keep them off the public version. So Companies House, HMRC and law enforcement will have them, while the public won’t, if you choose to opt out.
The same changes scrap the shorter “abridged” version of accounts, drop the directors’ report for small companies, and tighten the declaration you sign to skip an audit. The detail is in the Companies House written statement.
| Now (2026/27) | From April 2028 | |
|---|---|---|
| Micro-entity | Summary of what you own and owe. Profit not filed. | Profit filed, but you can keep it off the public version. |
| Small company | Summary plus notes. Profit and directors’ report can be left out. | Profit filed, with the same opt-out. “Abridged” version scrapped. |
That last column is the key bit. The opt-out works the same way for both, so choosing micro just to hide your profit will make less and less sense – small companies will be able to keep theirs private too.
A Company Accounts Software Change
From April 2028, every company will have to file its accounts using proper accounting software, in a computer-readable format. You won’t be able to use the free Companies House website or send paper forms for your accounts any more. The website remains open for other filings, such as your annual confirmation statement.
In plain terms, doing your own accounts for free is coming to an end. If you’re not already using software or an accountant who files for you, it’s worth sorting it out in good time rather than the week before.
So Which Should You Choose?
There’s no single right answer – it comes down to what your company looks like and what you need the accounts to do.
When Micro-Entity Accounts Make Sense
Micro-entity accounts usually suit you when:
- Your finances are simple, with nothing unusual to account for
- You aren’t borrowing or raising money
- You don’t own property or other assets worth more than you paid for them
- You want the cheapest, simplest filing
When It’s Worth Stepping Up to Small
Small company accounts tend to be worth the extra detail when:
- You’re applying for finance or a mortgage
- You’re talking to investors or thinking about selling
- You want your accounts to support your credit score
- You own property or assets worth showing at today’s value
How Double Point Can Help
The choice between micro and small can feel like small print, but it decides what the outside world sees of your company, what your accounts cost, and whether they help or hold you back when you need to borrow, raise money or sell.
With the rules tightening from April 2028, now is a good time to make sure you’re on the option that genuinely suits you, not just the cheapest one this year.
This guide is general information, not personal advice. The right choice depends on your company’s size, what it owns, your plans, and whether any of the exclusions that rule certain companies out of the micro and small regimes apply to you.
At Double Point, our chartered accountants prepare and file accounts for small companies and micro-entities across the UK – working out which option suits you, keeping your filing accurate and on time, and getting you ready for the changes ahead.
Book a consultation, and we’ll help you choose the right accounts for where your business is now, and where it’s heading.