Small but mighty. Size does matter!

​Our Accounts Up! service is only offered to micro-entity LTD companies, so we thought it a good idea to explain more what a micro-entity is.

Section 384A of the Companies Act 2006 explains that at least 2 of the following must be true to qualify as a micro-entity:

1. Turnover £1m or less

Turnover here is excluding VAT and if your accounting period is shorter or longer than 12 months, you must apportion it. So for example, if your accounting period were only 6 months, the turnover criteria would be £1m (i.e. 6/12th's of £500,000).

2. Average number of employees 10 or less

Section 384A(7) of the Companies Act 2006 explains how you calculate the 'average':

(a) find for each month in the financial year the number of persons employed under contracts of service by the company in that month (whether throughout the month or not),

(b) add together the monthly totals, and

(c) divide by the number of months in the financial year.

3. Balance Sheet Total £0.5m or less

This being the total of all your Assets on the balance sheet, both Fixed and Current ones.

The 2 year rule

These criteria must apply for 2 consecutive financial years (unless it's the company's first year of Accounts).

It's all here!

https://www.gov.uk/annual-accounts/microentities-small-and-dormant-companies