Micro-entity accounts vs dormant accounts: which can you file?

Micro-entity accounts vs dormant accounts at a glance

The two are not rival options for the same company. Dormant accounts are for a company with no significant accounting transactions. Micro-entity accounts are for a company that did have transactions but is small enough to use simpler rules.

So the order of the check matters. First decide whether the company was dormant for the whole accounting period. Only if it was not do you need to ask whether it qualifies as a micro-entity.

Source: Life of a company: annual requirements (part 1, accounts)

What dormant means for Companies House

For Companies House, the question is whether the company had any significant accounting transactions in the accounting period. If it had none, it is dormant. The test is about transactions, not about whether the company traded or made a profit. For both the Companies House and HMRC tests, see what a dormant company is.

Only a short list of transactions can be ignored: payment for shares taken by the subscribers when the company was formed; Companies House fees for a change of name, re-registration and filing confirmation statements; and a civil penalty for filing accounts late.

Anything else needs to be looked at. Bank charges, interest received, a subscription paid by a director on the company's behalf, or a single sale are not on that list. A company with only bank charges may therefore not be dormant for Companies House. The dormant company bank charges guide explains how to review those items.

Source: Life of a company: annual requirements (part 1, accounts)

Dormant for HMRC is a different test

HMRC applies its own rules for Corporation Tax. Its guidance says a company is usually dormant where it is a new limited company that has not yet started trading, or where it has stopped trading and has no other income, for example from investments. Some clubs and flat management companies can also count as dormant. In HMRC's list of activity, renting out property, advertising, employing staff and receiving interest all count, as well as buying and selling.

The two tests can give different answers. A company can be dormant for Corporation Tax but still have a transaction, such as a bank charge, that Companies House would expect to see in its accounts. The reverse can also happen. Check each test separately.

Where HMRC has issued a notice to deliver a Company Tax Return, the return must still be filed online for the dormant period. Telling HMRC the company is dormant is a separate step from filing dormant accounts at Companies House.

Source: Dormant for Corporation Tax

Micro-entity size limits from 6 April 2025

To be a micro-entity, a company must meet at least 2 of the 3 conditions below. The limits rose for financial years beginning on or after 6 April 2025.

In its first financial year, a company qualifies if it meets the conditions in that year. After that, it must meet them in that year and the year before. A company that qualified in one year but not the next may still claim the exemptions in that next year.

Some companies cannot use the micro-entity rules at all, whatever their size: public limited companies, overseas companies, unregistered companies, charitable companies, a parent of a group that is not small, and a subsidiary whose accounts are included in consolidated group accounts.

Source: Life of a company: annual requirements (part 1, accounts)

What each set of accounts must contain

Dormant accounts need a balance sheet, the previous year's figures for comparison and certain notes to the balance sheet. Statements above the director's signature must say the company was dormant throughout the period and claim the audit exemption. A dormant balance sheet is not always all zeros. Fully paid share capital, for example, usually still shows.

Micro-entity accounts are prepared with a balance sheet in a specified format, a profit and loss account, any notes and an auditor's report unless the company is exempt. The balance sheet must state, above the director's signature, that the accounts have been prepared in accordance with the micro-entity provisions.

A micro-entity may deliver only the balance sheet and notes to Companies House. On 23 October 2026, Companies House said the government had paused the planned April 2028 requirement for small and micro-entities to file profit and loss accounts. The separate requirement to file accounts using commercial software from 1 April 2028 remains.

Source: Life of a company: annual requirements (part 1, accounts)

Which route fits your company?

Which route fits depends first on whether the company had any significant accounting transactions in the period, and only then on its size. A company with none files dormant accounts. Otherwise it files accounts that report them, usually micro-entity accounts if it meets 2 of the 3 size limits and is not excluded. Work through the questions below in order.

1. Were there any accounting transactions in the period other than the ignored items above? If not, dormant accounts are likely to fit. The guide on how to file dormant company accounts covers the filing steps and the limits of the paper AA02 form.

2. Were there transactions? Then the company is not dormant for that period, even if the amounts were small. Check whether it is excluded from the micro-entity rules.

3. If it is not excluded, does it meet 2 of the 3 size limits for this year (and last year, if it is not the first year)? If so, micro-entity accounts are usually available: see how to file micro-entity accounts. If not, look at small company accounts or full accounts.

Source: Annual accounts: micro-entities, small and dormant companies

Common mistakes when choosing between dormant and micro-entity accounts

Treating no sales as dormant. Costs, interest and payments made by a director on the company's behalf are still transactions.

Relying on HMRC's dormant status for Companies House, or the other way round. They are separate tests.

Using the old micro-entity limits of £632,000 and £316,000 for a year that began on or after 6 April 2025, or the new limits for an earlier year.

Assuming last year's route still fits. A dormant company that paid one bill this year may need micro-entity accounts instead.

Leaving the choice until the deadline. Both routes have the same deadline: 9 months after the year end for a private company, or 21 months after incorporation for first accounts.

Source: Prepare and file annual accounts for a limited company

Get the right accounts filed

SimpleFilings charges £4.99 to check, prepare and file one set of qualifying dormant accounts after director approval. We do not prepare micro-entity accounts. We do not offer micro-entity or trading accounts filing; speak to an accountant or use the official Companies House route. If your records show transactions and you are unsure which route fits, ask us to review them first. A filing is only complete once Companies House accepts it, so start well before the deadline.