FRS 105 Micro Entity Accounts in Aldershot

FRS 105 is the UK financial reporting standard issued for entities that qualify as micro-entities and choose to apply the micro-entities regime. It sets out how those entities prepare their statutory accounts, including the formats used for the profit and loss account and balance sheet and the limited disclosures required. Compared with larger reporting frameworks, FRS 105 is deliberately streamlined: accounts are generally prepared on a historical cost basis, revaluations and fair value accounting are not permitted, and the note disclosures are far shorter. Accounts prepared in accordance with FRS 105 are presumed to give a true and fair view, which is why the standard is relied on so widely by small companies filing micro-entity accounts.

FRS 105 is available to companies that qualify for the micro-entities regime and then choose to apply it. Qualifying is not automatic and it is not simply a matter of being small — the company has to meet the size conditions and must not fall within any of the exclusions that make the regime unavailable. A company that qualifies is still free to use a different framework instead if it prefers. Because eligibility turns on your company's specific circumstances, including its legal form and the nature of its activities, it is worth checking before assuming FRS 105 is the right route for you.

No. The micro-entities regime is an available accounting framework, not a mandatory one. If your company qualifies as a micro-entity, you can choose to apply the regime and prepare FRS 105 accounts, or you can prepare accounts under a different framework such as FRS 102. In practice, FRS 105 is often attractive because it is simpler and shorter, but there can be reasons to prefer a fuller framework — for example where a lender, investor or group parent expects more detailed reporting. The decision should be made with your circumstances in mind rather than by default.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of the following 3 conditions: turnover of no more than £1 million, a balance sheet total of no more than £500,000, and an average of no more than 10 employees. Meeting those size conditions is the starting point, not the whole test. Other eligibility rules and exclusions can apply, so a company that appears to fit the size criteria may still be unable to use the regime. It is also possible for eligibility to change from one period to the next as a business grows or shrinks, so the position should be reviewed for each set of accounts.

FRS 102 is the general UK financial reporting standard used by a much wider range of companies, including small companies that do not use the micro-entities regime. FRS 105 is specifically for micro-entities and is considerably simpler. Under FRS 105, accounts are prepared on a historical cost basis and there is no option to revalue assets or use fair value measurement, whereas FRS 102 permits certain accounting policy choices and requires substantially more disclosure. FRS 102 also allows formats and disclosures that give a fuller picture of a business, which can matter where third parties want more detail. In short, FRS 105 is narrower and shorter; FRS 102 is broader and more detailed.

FRS 105 accounts are the company's statutory accounts, so if the company is required to file annual accounts, those accounts will generally need to be delivered to Companies House. Micro-entity accounts can benefit from reduced disclosure when filed, which is one of the practical advantages of the regime. The mechanics of delivery — and whether any filing method is restricted — depend on current Companies House requirements and on your company's circumstances, so it is sensible to confirm the position each year rather than relying on how things were done previously. Preparing the accounts and delivering them are two distinct steps, even though they happen in the same annual cycle.

Yes, and the distinction is important. FRS 105 Micro Entity Accounts are the company's financial statements, prepared under the micro-entities regime and filed at Companies House. A CT600 is a Corporation Tax Return submitted to HMRC, which reports the company's taxable profits and is prepared using tax rules rather than accounting standards alone. The two are linked because the accounts are usually the starting point for the tax computation, but adjustments are commonly needed — for example for disallowable expenses or capital allowances. Preparing compliant accounts does not, on its own, settle the company's Corporation Tax position, and filing deadlines and requirements for each are separate.

The more complete your records, the smoother the process. Useful information typically includes bookkeeping or accounting software data, bank and cash statements covering the full accounting period, sales and purchase records, payroll information and details of anyone employed by the company, records of assets bought or sold, stock or work in progress figures, details of loans and balances owed to or by the company, and the previous year's accounts. If your records are incomplete or held in different places, that is not a barrier — it simply helps to flag it early so the accounts can be built accurately rather than revised later.