A company qualifies as a micro-entity in relation to its first financial year if the qualifying conditions are met in that year.
Subject to subsection (3), a company qualifies as a micro-entity in relation to a subsequent financial year if the qualifying conditions are met in that year.
In relation to a subsequent financial year, where on its balance sheet date a company meets or ceases to meet the qualifying conditions, that affects its qualification as a micro-entity only if it occurs in two consecutive financial years.
The qualifying conditions are met by a company in a year in which it satisfies two or more of the following requirements—
For a period that is a company's financial year but not in fact a year the maximum figures for turnover must be proportionately adjusted.
The balance sheet total means the aggregate of the amounts shown as assets in the company's balance sheet.
The number of employees means the average number of persons employed by the company in the year, determined as follows—
In the case of a company which is a parent company, the company qualifies as a micro-entity in relation to a financial year only if—