Key takeaways
- A UK company balance sheet shows what the company owns, owes and is owed on the last day of its financial year, and it must be signed by a director.
- Small companies follow Format 1 in Schedule 1 of SI 2008/409: fixed assets, current assets, creditors, net current assets, then capital and reserves.
- In the worked example, net current assets of £23,650 plus fixed assets of £18,500 give total assets less current liabilities of £42,150.
- After long-term creditors and provisions, the example company has net assets of £30,000, which equals its capital and reserves.
- A micro-entity can use a shorter balance sheet with the same A to K headings but no sub-items.
- Small companies can qualify for audit exemption if they meet two of: turnover up to £15 million, balance sheet up to £7.5 million, 50 employees.
- An unaudited small company must print the directors' audit exemption statement on the balance sheet above the director's signature.
A UK small company balance sheet lists fixed assets, current assets, creditors and capital and reserves in a set order, and the two halves must balance. Below is a worked example for a fictional company with two years of figures, a blank template you can copy, and the shorter micro-entity version. All figures are illustrative.
What does a balance sheet show?
A balance sheet shows what a company owns, owes and is owed on the last day of its financial year. GOV.UK lists it as a required part of statutory accounts, with the profit and loss account and notes. The balance sheet must have a director’s name printed on it and be signed by a director.
Small companies use Format 1 or Format 2 in Schedule 1 to the Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008. Most use Format 1, the vertical layout below. See balance sheet format for the full statutory headings.
Worked example: Example Trading Ltd
Example Trading Ltd is a fictional small company with a 31 March year end.
| Balance sheet at 31 March | 2026 £ | 2025 £ |
|---|---|---|
| Fixed assets | ||
| Tangible assets | 18,500 | 12,000 |
| Current assets | ||
| Stocks | 6,200 | 4,800 |
| Debtors | 14,300 | 11,500 |
| Cash at bank and in hand | 22,750 | 15,900 |
| Total current assets | 43,250 | 32,200 |
| Creditors: due within one year | (19,600) | (16,400) |
| Net current assets | 23,650 | 15,800 |
| Total assets less current liabilities | 42,150 | 27,800 |
| Creditors: due after more than one year | (10,000) | (14,000) |
| Provisions for liabilities | (2,150) | (1,300) |
| Net assets | 30,000 | 12,500 |
| Capital and reserves | ||
| Called up share capital | 100 | 100 |
| Profit and loss account | 29,900 | 12,400 |
| Shareholders’ funds | 30,000 | 12,500 |
Brackets show amounts deducted. Statutory accounts show the previous year’s figures alongside, so readers can compare.
How the example adds up
Format 1 works as a running total. Here is how the 2026 column is built.
- Add the current assets: £6,200 + £14,300 + £22,750 = £43,250.
- Deduct creditors due within one year: £43,250 less £19,600 = £23,650 net current assets.
- Add fixed assets: £18,500 + £23,650 = £42,150.
- Deduct long-term creditors and provisions: £42,150 less £10,000 less £2,150 = £30,000 net assets.
- Check capital and reserves: £100 + £29,900 = £30,000. The balance sheet balances.
The profit and loss reserve moved from £12,400 to £29,900. In this example that is £37,500 of profit after tax less £20,000 of dividends. Our profit and loss template shows where the profit figure comes from.
What goes in each line?
Each line has a defined meaning in the regulations. In plain terms:
- Tangible assets: vans, equipment, computers and property, less depreciation
- Stocks: goods and materials held for sale
- Debtors: money owed to the company, such as unpaid customer invoices and prepayments
- Cash at bank and in hand: bank balances and petty cash
- Creditors due within one year: trade suppliers, corporation tax, VAT, PAYE and overdrafts
- Creditors due after more than one year: loans repayable after 12 months
- Provisions for liabilities: amounts set aside, such as deferred tax
- Profit and loss account: retained profits built up since the company started, less dividends
A director’s loan account appears in debtors if the director owes the company, or creditors if the company owes the director.
Blank balance sheet template
Copy this layout and fill in your own figures. Keep the lines in this order.
| Line | This year £ | Last year £ |
|---|---|---|
| Fixed assets: intangible | ||
| Fixed assets: tangible | ||
| Fixed assets: investments | ||
| Current assets: stocks | ||
| Current assets: debtors | ||
| Current assets: cash at bank and in hand | ||
| Creditors: due within one year | ( ) | ( ) |
| Net current assets (liabilities) | ||
| Total assets less current liabilities | ||
| Creditors: due after more than one year | ( ) | ( ) |
| Provisions for liabilities | ( ) | ( ) |
| Net assets | ||
| Called up share capital | ||
| Share premium account | ||
| Profit and loss account | ||
| Shareholders’ funds |
You can leave out a heading if it is nil this year and last year.
Micro-entity example
A micro-entity can use a shorter balance sheet. Schedule 1, Section C keeps the headings A to K but drops the sub-items. GOV.UK says a company is a micro-entity if it meets two of: turnover of £1 million or less, £500,000 or less on the balance sheet, and 10 employees or fewer.
| Micro-entity balance sheet | 2026 £ |
|---|---|
| Fixed assets | 18,500 |
| Current assets | 43,250 |
| Creditors: due within one year | (19,600) |
| Net current assets | 23,650 |
| Total assets less current liabilities | 42,150 |
| Creditors: due after more than one year | (10,000) |
| Provisions for liabilities | (2,150) |
| Net assets | 30,000 |
| Capital and reserves | 30,000 |
See micro-entity accounts for what else you file.
What statements go on the balance sheet?
An unaudited small company must include a directors’ statement on the balance sheet. Section 475 of the Companies Act 2006 requires it to say that the company is exempt from audit, that members have not required one, and that the directors acknowledge their responsibilities for the accounts. It sits above the director’s signature.
Small companies qualify if they meet two of: turnover up to £15 million, balance sheet up to £7.5 million and 50 employees. See audit exemption rules.
Checklist before you file
- The two halves balance: net assets equal shareholders’ funds.
- Last year’s figures match last year’s filed accounts.
- Corporation tax and VAT due are in creditors.
- The audit exemption statement is present, if you are claiming it.
- A director’s name is printed and the balance sheet is signed.
Companies House guidance, updated 23 October 2026, covers how to file.
Frequently asked questions
What is a balance sheet example for a small business?
A small company balance sheet lists fixed assets, current assets less short-term creditors, long-term creditors and provisions, giving net assets. Net assets must equal capital and reserves.
How do I make a balance sheet template?
Use the Format 1 order from Schedule 1 of SI 2008/409, with columns for this year and last year. Our blank template above follows that order.
Do micro-entities need a full balance sheet?
No. A micro-entity can use the shorter Section C format, which keeps the main headings but drops the sub-items.
What does net current assets mean?
It is current assets less creditors due within one year. In the example it is £23,650, showing the company can cover its short-term debts.
Who signs the balance sheet?
A director. The balance sheet must have a director’s name printed on it and be signed by a director.
Sources
Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance on 6 November 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.
- Small Companies and Groups (Accounts and Directors' Report) Regulations 2008, Schedule 1 (legislation.gov.uk)
- Prepare annual accounts for a private limited company (GOV.UK)
- Accounts for micro-entities, small and dormant companies (GOV.UK)
- Filing your Companies House accounts (Companies House)
- Companies Act 2006, section 475: audit exemption statement (legislation.gov.uk)