FRS 105 Micro Entity Accounts in Aberdeen — Prepared for Qualifying Micro-Entities

FRS 105 is the UK financial reporting standard that applies to the micro-entities regime. It sets out how a qualifying micro-entity recognises and measures items in its annual financial statements when it chooses to use that regime, and it is deliberately streamlined: fewer accounting options, simpler measurement rules and much shorter disclosure notes than frameworks such as FRS 102. It is an accounting framework rather than a tax regime, so it governs how the financial statements are prepared, not how much Corporation Tax is due.

FRS 105 is intended for companies that qualify for the UK micro-entities regime under company law and that choose to apply it. Qualification depends on meeting the relevant size conditions and on not falling within any of the exclusions that apply to the regime, and some rules work differently for companies that form part of a group. Meeting the size tests does not by itself guarantee eligibility, and eligibility is not the same as obligation: a qualifying company may instead report under another framework such as FRS 102 if that better suits its circumstances. If you are unsure where your Aberdeen company stands, it is worth checking before you prepare the accounts.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that qualifies may choose to apply it, and FRS 105 then applies to those accounts — but a qualifying company may also decide to report under a different framework. That decision can hinge on factors such as how much disclosure lenders or other readers expect, whether the company expects to grow beyond the size conditions, and whether group reporting requirements are relevant. Whichever framework is chosen, it should be applied consistently and the choice should be a considered one.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least two of the three applicable size 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. These conditions are subject to the relevant rules and exclusions, which means the size tests alone are not the whole story — some companies are excluded from the regime regardless of their size, and different considerations can apply to companies within a group. Because the position is assessed for each financial year, it is worth reviewing annually rather than assuming the same answer year after year.

Both are UK financial reporting standards, but they are aimed at different situations. FRS 105 is the streamlined standard for the micro-entities regime, with simpler measurement and far fewer disclosures — amounts are generally kept on a historical cost basis and there is little optionality. FRS 102 is used by a much wider range of entities, including small companies reporting under the small entities provisions, and it offers more accounting options alongside more extensive disclosure. In practice, the choice usually comes down to eligibility and to how much detail the readers of your accounts genuinely need, along with any plans for growth or external reporting expectations.

Where a company is required to prepare and file annual accounts, the accounts prepared under the micro-entities regime form its statutory financial statements and are filed at Companies House in the usual way for the accounting period in question. Micro-entity accounts can generally be filed in a form that carries less disclosure than accounts prepared under other frameworks, which is one reason the regime is popular with small companies. Filing the accounts is a separate step from dealing with HMRC, and it is worth planning for both together so that the figures you file and the figures you report for tax purposes are consistent with your records.

Yes, they are separate requirements. FRS 105 Micro Entity Accounts are the statutory financial statements prepared under the micro-entities regime and filed at Companies House where required. The CT600 is the Corporation Tax Return submitted to HMRC, and it is prepared for tax purposes rather than as a set of financial statements. The two are closely related in practice, because a Corporation Tax computation normally starts from the figures in the accounts and then adjusts for items treated differently for tax, such as disallowable expenses or capital allowances. Preparing them together helps avoid inconsistencies between what you file and what you report.

As a starting point, we need your company's name, registration details, accounting period dates and year end, plus your bookkeeping records and a trial balance if you use accounting software. Bank statements for all business accounts, sales and purchase records, expense receipts, payroll information if you employ staff, details of asset purchases or disposals, stock figures where relevant, loan agreements and share capital details are all useful. Copies of the previous year's accounts help with comparatives, and it is helpful to flag anything unusual, such as director loans, one-off transactions or changes in activity. Once we see what you have, we can confirm exactly what else is required for your FRS 105 Micro Entity Accounts in Aberdeen.