Hi all. I have a client who has jsut started up. They have a business plan with revenue of £139k year ended March 17, and £752k year ended March 18. Obviously these are just targets and not actual reported numbers. FRS105 says "An entity must meet at least two of these limits in two consecutive years to qualify as a micro-entity; T/o <=£632k, B/S <=£316k, employees <=10".
As the company has not traded for two years and proven the above can it be a micro entity, especially as it expectes to exceed the t/o limit in year 2?
Thanks
Replies (7)
Please login or register to join the discussion.
You go on actual results not estimates and, as far as the 2 year rule is concerned, you missed the "other than a newly incorporated company"
What's the problem?
CA/06 -384A (1) A company qualifies as a micro-entity in relation to its first financial year if the qualifying conditions are met in that year.
You have 9 months after the accounting year is over to look back and prepare the stat accounts, when you could decide whether the company is micro, small, medium, large or extra large.
You don't need to know - or even care - whether it's a micro company until you do the accounts.
Why are you asking now ?
Just chill and leave the question on the shelf for a year.
I suppose it could be good to plan ahead so that you have all the comparative figures ready if the accounting format should change.
However, read s. 384A(3). You have to exceed the limits for two consecutive years. So if you're micro this year, you'll be micro next year - even if your turnover is £100million and you have 5,000 employees.