Limited company guide
The turnover, balance sheet and employee limits that decide whether a company is a micro-entity.
Written and reviewed by Waqas Sagar Member of ICAEW, Fellow of ACCA, Fellow of AAT, a double graduate and entrepreneur at heart, helping startups grow and serving thousands of businesses nationwide with an excellent team. Published by LimitedCompany.Accountants, 12 London Road, Morden, London SM4 5BQ. Reviewed 12 September 2026 against 2026/27 UK rates and current Companies House and HMRC guidance.
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QuickBooks PartnerCertified ProAdvisor100+ yearsCombined team experienceFully insuredUp to £2m indemnityA company qualifies as a micro-entity if it meets at least two of three conditions: turnover of no more than £1m, a balance sheet total of no more than £500,000, and no more than 10 employees on average.
The three tests
How the tests work over time
Who is excluded
A company qualifies as a micro-entity if it meets at least two of three conditions: turnover of no more than £1m, a balance sheet total of no more than £500,000, and no more than 10 employees on average.
Those uplifted limits apply for financial years beginning on or after 6 April 2025. Before that the limits were £632,000 turnover and £316,000 balance sheet total, with the same 10-employee test.
In the first financial year, the tests apply to that year alone. After that, a company keeps or loses micro status only once it has met or failed the conditions for two consecutive years, so a single busy year does not force a change.
Balance sheet total means total assets before deducting liabilities, a point that catches companies holding property or equipment.
Some companies cannot be micro-entities regardless of size, including charities, LLPs in certain circumstances, investment undertakings, insurance and credit institutions, and companies included in consolidated group accounts.
Thresholds, rates and deadlines quoted here reflect the 2026/27 UK position. Check current GOV.UK guidance, or ask us, before you rely on them for your own company.
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We work with company directors across London and Surrey from our office at 12 London Road, Morden, London SM4 5BQ. Pick your area, or send the form below and we will call you back.
Frequently asked
Turnover is gross sales revenue for the period, not profit. Pass-through costs count if you are acting as principal.
The average number of employees during the year, including part-timers as individuals rather than full-time equivalents. Directors on payroll count.
Keep bank statements, sales and platform reports, purchase invoices, payroll records, VAT workings, finance agreements and Companies House correspondence. We confirm the exact list at onboarding and identify gaps before a filing deadline becomes urgent.
The fee depends on transaction volume, record quality, VAT and payroll requirements, historic catch-up and the level of reporting needed. We agree a fixed scope and price before technical work starts, with published packages available on our fees page.
Yes. We request professional clearance, collect the prior records and authorities, check the next Companies House and HMRC deadlines, and give you one clear handover list. The process is normally completed remotely.
Yes. We work through secure cloud records, scheduled reviews and digital approvals, while keeping a named team available by phone, video call and email. Clients can also visit our Morden office by appointment.
We regularly work with Xero, QuickBooks, FreeAgent, Sage and connected sales or expense apps. The right setup depends on transaction volume, integrations and the reports you need, not simply the software brand.
The relevant calendar may include annual accounts, Corporation Tax payment and return dates, confirmation statements, VAT returns, payroll submissions and Self Assessment. We map the dates from your company year end and registrations.
No. This page explains general UK rules and common accounting treatment. Your facts, contracts and wider tax position must be reviewed before you rely on a conclusion.
Included approach
Check the current rules
Deadlines, thresholds and filing rules change. GOV.UK and Companies House publish the current statutory position; advice should then be applied to your company’s circumstances.
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Pick a time that suits you and a qualified accountant will call you about your company, deadlines and fees.
Appointments run monday to friday, 9:00am to 5:30pm. Your confirmation is emailed straight away.
