The Litmus library
Micro-Entity Accounts: Check Eligibility and Records
Micro-entity accounts offer a reporting framework for qualifying companies, not a reason to stop keeping detailed records. Eligibility depends on the relevant period, size conditions and exclusions. Establish the correct framework before deciding what needs to be prepared and filed.
Check the company against the current criteria
Review turnover, balance-sheet totals and employee measures using the rules for the accounting period. Consider exclusions and the effect of group membership. A company that describes itself as small is not automatically eligible. Keep the calculation so the basis for the chosen framework can be reviewed later. Before deciding, write a short fact sheet covering the owners, the activity, the places involved and the intended outcome. Separate confirmed facts from assumptions that still need checking. Give the reviewer the actual documents rather than a summary assembled from memory. This makes the advice easier to apply and reduces the chance that a crucial detail is overlooked.
Prepare full underlying bookkeeping
A shorter public filing still depends on reliable records. Reconcile bank accounts, debtors, creditors, assets and director balances. Review whether the accounts explain the business appropriately and whether specialist transactions need attention. Reduced disclosure does not make unsupported figures acceptable or remove directors’ responsibility for approval. Create a working folder with the source records, the questions raised and the answer received. Check that names, addresses and periods agree across documents before anything is submitted. If the instructions are unclear, resolve that point with the relevant authority or a suitable adviser. A documented decision is easier to revisit when the business changes than an informal assumption.
Coordinate accounts and tax work
The material filed publicly and the information needed for tax may differ. Check the current filing requirements before preparing the final package. Retain signed accounts, supporting schedules and approval records, and ensure the company’s tax preparer receives the detail needed beyond the public balance sheet. Assign a named person to the next action and record how completion will be evidenced. Keep accepted filings, correspondence and supporting calculations together. Revisit the arrangement when ownership, location or activity changes. Where more than one country or authority is involved, ask who will coordinate the work so each adviser understands the wider picture before relying on another person’s conclusions.
Check the official guidance
Rules and provider requirements can change. Check the current official guidance and seek advice on your circumstances before acting.
Does calling a business small establish micro-entity eligibility?
No. Check the period-specific size criteria, exclusions and relevant group circumstances.
Do shorter public accounts remove the need for full records?
No. Reliable underlying bookkeeping and support for the accounts remain necessary.
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