The Small Companies (Micro-Entities’ Accounts) Regulations 2013 were approved by the UK Government and introduced major (but optional) accounting exemptions for micro-entities. Micro-entity companies must meet at least two out of the three conditions:
turnover less than £632,000
balance sheet total not more than £316,000
and less than 10 employees
The benefits of being a micro-entity is that your set of accounts will be condensed and the amount of information held at Companies House about your business will decrease.
Another advantage to Micro-Entity accounts is the reduced information that has to be disclosed to HMRC. However, the Corporation tax return remains unchanged.
Also, credit referencing agencies and banks may require additional information to make credit decisions for loan finance and asset purchases.
The amount of work required to complete a set of Micro-Entity accounts is effectively the same producing a set of Small Company accounts, the only difference being is the reports that are produced. All figures must be accurate and complete, even though they’re not shown on the reports submitted to Companies House.
Whilst you can file a set of Micro-Entity accounts and take advantage of the lower level of disclosure to HMRC, we believe it is as equally beneficial for all parties to provide detailed financial information to allow lenders and suppliers to make informed business decisions.