Why we ask for fewer expense figures than other software

Short version. If you have filed before and were asked to list salaries, audit fees, office supplies and the rest line by line, being asked for only a few totals here can feel like something is missing. It is not. Micro-entity accounts use a short format set by company law, so your costs are reported in summarised lines rather than itemised ones. Nothing is being dropped, and nothing extra is expected of you. Your own records still need the detail behind those totals, but the detail is not what gets filed.

1. Why other software asks for more

Software that prepares full statutory accounts builds them from a detailed breakdown. That is why it walks you through category after category: it is assembling something close to a trial balance.

We prepare micro-entity accounts under FRS 105. The layout of those accounts is fixed by company law and is deliberately brief. A micro-entity reports a small number of summary figures rather than an itemised list, which is the whole point of the regime: the smallest companies get the shortest accounts. Asking you to split out audit fees from office supplies would produce two numbers we would then have to add back together before filing.

2. What each regulator actually receives

This is the part most customers do not expect, and it is the strongest reassurance we can give you. The two regulators do not receive the same document.

• Companies House receives a balance sheet, and no profit and loss account at all. The directors of a micro-entity may elect not to deliver one, under section 444(5A) of the Companies Act 2006. We make that election for you and include the required statement in the accounts. So your expenses, in any form, summarised or itemised, never appear on the public register.
• HMRC receives your Corporation Tax return and a fuller set of accounts, which do include a profit and loss account. It shows turnover, cost of sales, administrative expenses, depreciation, interest and tax. We also report your average number of employees, which is the one staff-related figure micro-entity accounts require.

3. What the CT600 itself asks for

The Corporation Tax return has no box for audit fees, none for office supplies, and none for any other expense category. It asks for totals. Your turnover goes in box 145 and your trading profit in box 155, and the rest of the return deals with adjustments, allowances and reliefs rather than with how you spent the money.

So a return prepared from totals is not a lesser version of one prepared from a long list. It is the same return, and the boxes HMRC reads are identical either way.

4. Where your costs go in our fields

• Cost of sales: what it directly cost you to produce or buy what you sold. Raw materials, stock, subcontractors on a job.
• Administrative expenses: the running costs of the business. Rent, insurance, software, accountancy and audit fees, marketing, office supplies, and salaries. This is the field that absorbs most of what other software makes you itemise.
• Depreciation and amounts written off assets: its own field, and this one genuinely matters. Depreciation is added back when we work out your tax, because it is not a tax-deductible cost. Relief for buying equipment comes through capital allowances instead.

Please do not fold depreciation into administrative expenses. If you do, your accounts will still balance and your profit will still look right, but the add-back has nothing to work from and your Corporation Tax will be wrong. It is the one place where summarising too far causes a real problem, and it is worth checking before you submit. Your tax computation, which you can download before filing, shows the add-back as its own line so you can confirm it.

Some costs sit in your accounts but are never deductible, such as client entertaining and fines. Those are handled separately. See disallowable expenses.

5. What you still have to keep

Filing summarised figures does not mean you can keep summarised records. The company must still be able to show what the totals are made of. HMRC can open an enquiry into your return, normally within 12 months of the date you file, and can ask to see the underlying detail. Keep your bookkeeping, invoices and payroll records as you always would.

The practical test is simple: if someone asked you next year what made up your administrative expenses figure, you should be able to answer from your records, even though that breakdown was never submitted.

6. When you need more than this

Micro-entity accounts are not for every company. If your company exceeds the micro-entity size limits, or you need itemised accounts for a lender or an investor who expects to see the categories, you need FRS 102 Section 1A accounts, which we do not prepare. That means an accountant or software that produces full accounts. See which company types we support.

For the same reason we do not ask you to choose audit settings, because the answers are fixed for this kind of filing, see audit exemption for micro-entity accounts.

This article is general guidance, not tax or accounting advice. If you are unsure which field one of your costs belongs in, or whether your company still qualifies as a micro-entity, speak to an accountant before you file.