What goes in micro-entity accounts? (FRS 105, 2026)

In short: Micro-entity accounts contain a balance sheet in one of two short formats, a profit and loss account with eight headings, a few notes at the foot of the balance sheet, and statements above the director's signature. Companies House needs only the balance sheet and its notes; members and HMRC get the full set (GOV.UK: Micro-entity, small and dormant company accounts).

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What is included in micro-entity accounts in 2026?

Micro-entity accounts include a balance sheet, a profit and loss account and a short set of notes, and the balance sheet carries statements about the micro-entity rules, the audit exemption and the directors' responsibilities. There is no directors' report and no accounting policies note, and the minimum items are presumed to give a true and fair view (CA 2006 s.396).

A micro-entity is a company that meets at least two of three limits: for accounting periods beginning on or after 6 April 2025, turnover of no more than £1 million, a balance sheet total of no more than £500,000 and no more than 10 employees on average (GOV.UK: Preparing and filing Companies House accounts). A micro-entity that uses the micro-entity regime prepares its accounts under FRS 105, the Financial Reporting Council's standard for the micro-entities regime (FRC). Section 415(1A) of the Companies Act 2006 removes the directors' report for a micro-entity (CA 2006 s.415). Which companies qualify, and when FRS 102 Section 1A suits a company better, is covered in the FRS 105 vs FRS 102 guide. The table lists each part of micro-entity accounts and whether it reaches the public record in 2026.

What is the micro-entity balance sheet format?

A micro-entity balance sheet follows one of two formats in Section C of Part 1 of Schedule 1 to SI 2008/409. Format 1 is a single column of 11 lettered items, from called-up share capital not paid down to capital and reserves. Format 2 shows the same content as assets in one block and capital, reserves and liabilities in another (SI 2008/409 Sch 1 para 1).

Format 1 runs in this order: A called-up share capital not paid; B fixed assets; C current assets; D prepayments and accrued income; E creditors falling due within one year; F net current assets or liabilities; G total assets less current liabilities; H creditors falling due after more than one year; I provisions for liabilities; J accruals and deferred income; and K capital and reserves (SI 2008/409 Sch 1). Format 2 lists the four asset items first, then capital and reserves, provisions, creditors, and accruals and deferred income, and a note to the formats requires creditors due within one year and after one year to be shown separately. In plain English, B is assets kept for long-term use, such as equipment, property and investments, C is stock, money owed to the company and cash, and K is the shareholders' stake. Paragraph 5 of Schedule 1 leaves out a heading with no amount in either year, and paragraph 7 puts last year's figure beside every item (SI 2008/409 Sch 1 para 7).

Micro-entity accounts can't include fair value, revaluation or deferred tax. Regulation 3(1A) of SI 2008/409 says the alternative accounting rules, which allow revaluation, and the fair value accounting rules don't apply to a company that qualifies as a micro-entity (SI 2008/409 reg 3). FRS 105 (September 2024 edition) therefore measures property, plant and equipment and investment property at cost less accumulated depreciation and impairment (paragraph 2.38), and paragraph 24.7 says a micro-entity shall not recognise deferred tax. So the balance sheet has no revaluation reserve and no deferred tax provision. A property company that wants its investment property shown at market value prepares FRS 102 Section 1A accounts instead. A micro-entity that keeps to these rules has its minimum items presumed to give a true and fair view (CA 2006 s.396).

Do micro-entity accounts show a profit?

Yes. The accounts a micro-entity prepares for its members include a profit and loss account, and HMRC receives that full set with the Company Tax Return (CT600). The copy delivered to Companies House can leave the profit and loss account out until 1 April 2028, so the public record may show only the balance sheet (GOV.UK: Companies House accounts filing changes from April 2028).

The micro-entity profit and loss account has eight headings: A turnover; B other income; C cost of raw materials and consumables; D staff costs; E depreciation and other amounts written off assets; F other charges; G tax; and H profit or loss (SI 2008/409 Sch 1). Paragraph 1(1A)(b) of Schedule 1 says these are the only items a micro-entity's profit and loss account must show, so it needs no gross profit or operating profit lines. Costs that fit none of headings C to E, such as rent, insurance and professional fees, go under other charges. The tax line holds current tax only, because FRS 105 bars a micro-entity from recognising deferred tax. The profit for the year then flows into capital and reserves on the balance sheet.

Members and HMRC see the profit; the public may not. Section 444(1) of the Companies Act 2006 says a company in the small companies regime must deliver its balance sheet to Companies House and may also deliver its profit and loss account (CA 2006 s.444). A micro-entity that leaves the profit and loss account out doesn't have to say so on the balance sheet, because section 444(5C) switches that disclosure rule off for accounts prepared under the micro-entity provisions. HMRC gets the full set, profit and loss account included, since section 396 makes it part of every company's accounts. HMRC says Company Tax Returns must be sent online using iXBRL for accounts and computations (GOV.UK: Businesses XBRL guide), so the accounts go as an iXBRL file beside the tax computation and the CT600. The 2028 Companies House changes guide explains what changes at Companies House from April 2028.

What notes do micro-entity accounts need, and where do they go?

Micro-entity accounts need at most four notes, which the Companies Act and FRS 105 put at the foot of the balance sheet: advances, credits and guarantees to directors; financial commitments, guarantees and contingencies; the average number of employees; and off-balance sheet arrangements. Only the employee number applies to every company; the others apply only when the company has the item (CA 2006 s.472).

Section 472(1A) of the Companies Act 2006 says the notes required by section 413 and by regulation 5A and paragraph 57 of Schedule 1 to SI 2008/409 "must be included at the foot of the balance sheet" (CA 2006 s.472). Regulation 5A explains the short list: nothing in Schedule 1 requires a micro-entity to give notes, except the paragraph 57 note on financial commitments (SI 2008/409 reg 5A). So there is no accounting policies note, no note of fixed asset movements and no note of debts due after five years. FRS 105 paragraph 6.2 places all of a UK micro-entity's notes at the foot of the balance sheet, adding employee numbers and the section 410A note on arrangements kept off the balance sheet. The section 410A note is needed only when the risks or benefits of those arrangements are material at the year end.

The directors' advances note applies whenever the company advanced money or gave credit to a director, or guaranteed a director's debts, during the year. For each advance or credit, section 413 asks for the amount, an indication of the interest rate, the main conditions and any amounts repaid, written off or waived, with totals; for a guarantee, it asks for the main terms, the maximum liability and any amount paid (CA 2006 s.413). Section 413(7) covers every advance that existed at any time in the year, so a loan made and repaid within the year still goes in the note. The director's loan account guide explains who owes whom, and the notes to the accounts guide gives example wording for the note.

The commitments note gives the total of financial commitments, guarantees and contingencies not included in the balance sheet, and the nature and form of any security given. Pension commitments and commitments to group or associated undertakings are totalled separately (SI 2008/409 Sch 1 para 57). FRS 105 paragraph 15.17 sends a micro-entity's operating lease commitments to this note. The employee note gives the average number of persons employed in the financial year, because section 411(1) of the Companies Act 2006 applies to every company, micro-entities included (CA 2006 s.411). The average adds up the number of people employed under contracts of service in each month and divides by the number of months, so a director counts only if employed under a contract of service.

Which statements and signature must a micro-entity balance sheet carry?

A micro-entity balance sheet must carry, above the director's signature, a statement that the accounts are prepared under the micro-entity provisions, plus three audit-exemption statements: the exemption claimed, that members have not required an audit, and that the directors acknowledge their responsibilities. The board approves the accounts and a director signs the balance sheet (CA 2006 s.414).

Section 414 of the Companies Act 2006 says the board of directors approves the annual accounts, a director signs them on the board's behalf, and the signature goes on the balance sheet. For accounts prepared under the micro-entity provisions, section 414(3)(a) requires a statement to that effect in a prominent position above the signature. Section 475 adds the audit exemption statements: a statement by the directors that the company is exempt from audit, which in practice names section 477 for small companies or section 480 for dormant companies (CA 2006 s.475). A strengthened eligibility statement is due from April 2028 (GOV.UK: Companies House accounts filing changes from April 2028). It also states that the members have not required an audit under section 476, and that the directors acknowledge their responsibilities for accounting records and preparing accounts. Section 475(4) puts these statements above the signature too. The Companies House copy must also name the director who signed it (section 444(6)).

What does a worked micro-entity balance sheet look like?

Taxley's worked example shows a Format 1 balance sheet for Example Studio Ltd, a fictional one-director design company, at 31 March 2026, with the statements and notes it would carry. It is an illustration of layout, not a template for filing: every figure is invented and rounded (SI 2008/409 Sch 1 para 1).

Example Studio Ltd's financial year ran from 1 April 2025 to 31 March 2026. GOV.UK applies the earlier limits to periods beginning between 30 September 2013 and 5 April 2025: turnover of no more than £632,000, a balance sheet total of no more than £316,000 and no more than 10 employees (GOV.UK: Preparing and filing Companies House accounts). The example company's turnover is £84,000, and its balance sheet total, which section 384A(6) defines as the total of the amounts shown as assets, is £38,000 (CA 2006 s.384A). With one employee, it is inside all three limits. It has no unpaid share capital, prepayments or provisions in either year, so those headings are left out, and last year's figures sit in the right-hand column.

Statements above the signature (illustration): For the year ending 31 March 2026 the company was entitled to exemption from audit 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 for the year in question in accordance with section 476. The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts. The accounts have been prepared in accordance with the micro-entity provisions and delivered in accordance with the provisions applicable to companies subject to the small companies regime. Approved by the board on [date] and signed on its behalf by [name], Director.

Notes at the foot of the balance sheet (illustration): 1. The average number of employees during the year was 1 (2025: 1). 2. During the year the company advanced £3,000 to a director, interest-free and repayable on demand. £3,000 was repaid in the year, nothing was written off or waived, and nothing was owed at 31 March 2026. 3. The company has equipment lease commitments of £4,000 not included in the balance sheet (2025: £6,000).

Three points in Taxley's worked example are worth checking in your own accounts. First, capital and reserves equals the net assets total, and the £11,000 rise is the year's profit after tax less any dividends, assuming no new shares were issued. Second, the directors' advances note appears even though the loan was repaid, because section 413(7) covers every advance that existed during the year (CA 2006 s.413). Third, the employee figure of 1 assumes the director works under a contract of service. The fourth statement uses the combined sentence GOV.UK gives micro-entities (GOV.UK: Preparing and filing Companies House accounts). The Companies House copy would carry the same balance sheet, statements and notes without the profit and loss account, which members and HMRC also receive.

How does Taxley prepare and file micro-entity accounts?

Taxley (taxley.co.uk), UK online software that prepares and files the Company Tax Return (CT600) with HMRC and the annual accounts with Companies House, prepares FRS 105 micro-entity accounts in iXBRL for £44.50 (promotion price until 31 Dec 2026; £89.00 from 1 Jan 2027). The fee covers the accounts, the tax computation and the CT600, and filing the accounts at Companies House (GOV.UK: Company authentication codes for online filing).

Taxley's micro-entity accounts use the formats in this guide. The balance sheet uses the Format 1 headings, with capital and reserves split into share capital and the profit and loss reserve, and the copy for members and HMRC adds the micro-entity profit and loss account with a profit before taxation subtotal. Above the signature, Taxley prints the section 477 audit exemption statement (section 480 for a dormant company), the section 476 and directors' responsibilities statements and the micro-entity provisions statement, then the board approval date and the signing director's name (CA 2006 s.475). Its notes follow the statements, approval date and director's name, under a "Notes to the financial statements" heading: a basis of preparation note, the average number of employees, and any directors' advances, commitments or secured debts note you write, printed word for word. Taxley has no box for an off-balance sheet arrangements note.

Taxley keeps the accounts as a draft until the approval date, the signing director and the average number of employees are entered, and while micro-entity accounts carry a fair value movement, a revaluation reserve or deferred tax. HMRC receives the full accounts; the Companies House copy leaves out the profit and loss account and says the directors have elected not to deliver it (CA 2006 s.444). To see how Taxley files these accounts alongside your return, read File micro entity accounts online with your CT600.

Once the return is paid and the accounts are finished, you press "File accounts at Companies House" and Taxley files that copy at no extra cost, using the company's authentication code, as it has since 28 September 2026. Taxley doesn't file the confirmation statement and doesn't give tax advice. Taxley prints the advances, commitments and secured debts notes word for word as you write them, without checking the wording, and has no box for an off-balance sheet arrangements note; do I need an accountant? lists what else it doesn't cover. To see whether your company fits, take the 30-second check to see whether Taxley fits your company.

Frequently asked questions

Can micro-entity accounts show property at market value?

No. Regulation 3(1A) of SI 2008/409 switches off the revaluation and fair value rules for a micro-entity, and FRS 105 measures property, plant and equipment and investment property at cost less depreciation. A company that wants investment property at fair value prepares FRS 102 Section 1A accounts instead.

Is an accounting policies note needed in FRS 105 accounts?

No. Regulation 5A of SI 2008/409 removes the Schedule 1 notes for a micro-entity except financial commitments, and the accounting policies note is one of those removed. The accounts still carry the directors' advances note, the commitments note and the average number of employees where they apply.

Are micro-entity accounts public?

The copy delivered to Companies House is public, because Companies House registers company information and makes it available to the public (GOV.UK: Companies House). In 2026 that copy can be the balance sheet with its notes and statements, without the profit and loss account.

Does a micro-entity need a directors' report?

No. Section 415(1A) of the Companies Act 2006 says the duty to prepare a directors' report doesn't apply to a company that qualifies as a micro-entity. A small company above the micro-entity limits must prepare one for its members, even if it doesn't deliver it to Companies House.

This guide describes the Companies Act 2006, SI 2008/409 and FRS 105 as checked on 28 September 2026. It is not advice for a particular company, and the worked example is an illustration, not a template for filing.