Micro-entity rules
Micro-entity treatment requires more than small figures. Understand the current £1 million / £500,000 / 10 limits, inclusive two-of-three test, consecutive-year history, transition, groups and statutory exclusions.
Micro is a bounded reporting regime, not just a size label
A micro-entity is a company meeting the size and history requirements of Companies Act 2006 section 384A and not excluded from using the micro provisions by section 384B. For financial years beginning on or after 6 April 2025, at least two of turnover not more than £1 million, total balance-sheet assets not more than £500,000 and average employees not more than 10 are required; exactly at a limit counts.
Micro companies sit within the small-company regime but have additional restrictions and their own size limits. Being small does not automatically make a company micro; a numerical micro pass does not establish all legal and practical conditions.
The paired checker reports the numerical size test, a separate supplied-history condition and legal-review gates. It supports actual twelve-month UK private-company years under the current regime, not historical, irregular-period, LLP or full group eligibility. Primary rules reviewed 28 September 2026.
Rule summary
Current thresholds, continuity and legal gates
For financial years beginning on or after 6 April 2025, Companies Act 2006 section 384A requires at least two of turnover not more than £1 million, balance-sheet total not more than £500,000, and average employees not more than 10. Equality counts. Earlier years use a different regime and are not calculated here.
Total assets means the aggregate assets in the balance sheet, not net assets or equity. Employees means the sum of persons employed under contracts of service in each month divided by the number of months. For twelve months, a total of 120 means an average of 10; 121 is above 10, even if someone rounds the average down.
In the first financial year, the current numerical conditions determine size qualification. For later years, entering or leaving micro size status generally requires two consecutive numerical changes. A previously qualifying company can retain size status for one failure; a non-qualifying company normally needs two qualifying years to enter. Previous numerical conditions and previous size qualification are different facts.
SI 2024/1303 regulation 3 requires previous conditions and qualification to be reassessed as though the increased thresholds applied in those and preceding years. A prior company with turnover £800,000, assets £400,000 and average employees 8 passes the new limits even though both monetary figures exceeded the old limits. Do not treat its old filed classification as the answer to the transition test.
Short and long financial years require a proportionate turnover maximum under section 384A(5); the balance-sheet and employee maxima are not proportionately changed. This checker deliberately requires review instead of approximating a non-annual period. Verify the actual accounts period before confirming twelve months.
A parent must itself meet micro size/history conditions and head a small group under section 383. A parent preparing consolidated group accounts, or a non-parent subsidiary included in consolidated group accounts, cannot use the micro provisions under section 384B(2). Membership of a group alone is not a blanket ban; all group cases in this screen require separate review.
Exclusions must be checked for any time in the financial year: public companies; authorised insurance, banking, e-money, MiFID investment and UCITS management companies; insurance-market activity; Master Trust scheme funders; members of an ineligible group; investment undertakings; financial holding undertakings; relevant credit institutions and insurance undertakings; and charities. See sections 384 and 384B for exact legal definitions rather than guessing from a trading description. Overseas/unregistered and other specialist entities are outside this private-company screen.
| Twelve-month current-regime criterion | Maximum (inclusive) |
|---|---|
| Turnover | £1,000,000 |
| Total balance-sheet assets | £500,000 |
| Average employees | 10 (120 employee-months / 12) |
Worked examples
How the rule behaves in practice
- First-year numerical pass: An ordinary standalone private company's actual twelve-month first financial year begins 6 April 2025. Turnover £800,000, total assets £400,000 and monthly employee counts total 96 (average 8). Prior-year answers are Not applicable. 3 of 3 numerical criteria met. The first-year size condition is met. This is not a final filing opinion: exclusions, records and accounting/audit requirements still need verification.
- Equality counts; employee rounding does not: A current-regime twelve-month year has turnover exactly £1,000,000, assets exactly £500,000 and employee-month total 120. All 3 criteria are met. If every value increases to £1,000,000.01, £500,000.01 and 121, none is met. An average of 121/12 is above 10; rounding it to 10 must not change the result.
- Same figures, different continuity: Current turnover £900,000, assets £450,000 and employee-month total 108 pass all criteria. Previous reassessed numerical conditions were not met. Compare a company whose previous size qualification was Yes (a retained-status year) with one whose previous qualification was No. The first company's size/history condition is met; the second's is not yet met because this is only its first qualifying year. Conversely, a qualifying company with previous conditions Yes can retain size status for one current numerical failure; a second consecutive failure loses it. Unknown history requires review, not an eligibility assertion.
- Small figures do not override legal exclusions: Turnover £500,000, assets £200,000 and employee-month total 60 pass the numerical limits, but the company is charitable, or is a subsidiary included in consolidated group accounts. A charity is excluded under section 384B; the consolidated subsidiary is also excluded. Select Listed exclusion if verified, or Group/unsure for unresolved facts. The screen does not assert legal eligibility. An ordinary group company not consolidated is not automatically prohibited, but needs group-specific review.
Practical consequences
- First-year qualification and the later two-consecutive-year rule are different. Do not describe a one-year numerical failure as automatic loss, or one numerical pass after non-qualification as automatic entry. Reassess earlier conditions and qualification under SI 2024/1303 regulation 3 rather than copying the previous filed label.
- Parents must head a small group as well as meet micro size conditions. Consolidated-account parents and subsidiaries included in consolidated accounts, and members of an ineligible group, face distinct exclusions. Charities and listed financial/investment entities cannot bypass exclusions by having small figures. Use the exact primary definitions; unresolved group/company facts require review.
- Current Companies House guidance allows qualifying micro companies to use simplified accounts provisions and reduced public filing, including exemption from publicly filing the profit-and-loss account and directors' report. A profit-and-loss account must still be prepared. Micro status does not itself establish audit exemption or remove accounts deadlines. Check the current filing service and accounting framework before submitting; future filing reforms must be assessed separately when effective.
Important limits
- Historical, short, long or uncertain periods require review: no unadjusted current-limit numerical result is given.
- Groups, consolidated accounts, excluded entities, LLPs and uncertain company facts are not fully assessed. A numerical pass is not a legal eligibility opinion.
- This does not determine the correct accounting standard, audit exemption, distribution capacity or filing format.
Primary sources and review date
Reviewed on . Preserved source review from the accepted scoped statutory repair; this contract migration does not re-date that review.
Applies to: Actual twelve-month financial years beginning on/after 6 April 2025; current thresholds and transitional prior-year reassessment.
Reviewed scope: Numerical size and supplied history screen, not final legal/filing eligibility. Groups, exclusions and missing facts require review.
- Companies House — micro-entity accounts, qualification and exclusions (section 9) (verified 28 September 2026)Supports: micro-entity accounts, qualification and exclusions (section 9)
- Companies Act 2006 section 384A — size, history, period and employee rules (verified 28 September 2026)Supports: size, history, period and employee rules
- Companies Act 2006 section 384B — micro exclusions and consolidated accounts (verified 28 September 2026)Supports: micro exclusions and consolidated accounts
- Companies Act 2006 section 384 — excluded companies and ineligible groups (verified 28 September 2026)Supports: excluded companies and ineligible groups
- SI 2024/1303 — effective date, prior-year transition and increased thresholds (verified 28 September 2026)Supports: effective date, prior-year transition and increased thresholds
Review basis and change triggers
Reviewed model: micro-entity-eligibility-checker: Financial years beginning on/after 6 April 2025; current twelve-month numerical/history screen; reviewed 28 September 2026
- A cited source or statutory regime changes.
- Reviewed content, runtime adapter or domain implementation changes.
- A new effective period falls outside the supported scope.
Turn the result into an action plan
- Start with the actual financial year. For non-annual years obtain the lawful proportionate turnover limit; this checker intentionally does not approximate it.
- Gather turnover, aggregate assets and twelve monthly employee counts from company records, and review the prior size history under the transition.
- Check company/group/consolidation and excluded-entity facts using the linked statutes and Companies House guidance. Keep the evidence supporting the reporting choice.
- Use the paired checker as a documented numerical/history screen, not a legal filing certificate; compare Small Company thresholds and verify the accounts deadline separately.
Use the tool
Micro-Entity Eligibility Checker
Screen current-regime twelve-month private-company figures against the micro size limits, then assess supplied size history separately. Group, exclusion and missing facts remain explicit review gates—not a final filing opinion.
FAQ
Does passing the checker mean I can file micro accounts?
No. It establishes the numerical result and, where supplied, a separate size/history condition. Legal exclusions, group conditions and practical accounting/filing requirements remain distinct.
What changes when the company is a micro-entity?
Micro is a restricted subset of the small-company regime, not an interchangeable label. Current Companies House guidance permits reduced public filing and simpler micro provisions, but accounts still have to be prepared. Audit exemption is a separate question.
Can I use this for a six-month or eighteen-month year?
No. Turnover limits must be proportionately adjusted by law. Select the non-annual option: the tool requires review and does not apply the ordinary annual limit.