FRS 105 Micro Entity Accounts in Barry

FRS 105 is the UK financial reporting standard that applies to companies which qualify as micro-entities and choose to apply the micro-entities regime. It sets out how the financial statements should look — the formats for the profit and loss account and the balance sheet, and the limited notes that accompany them — on a simplified basis intended for the smallest companies. Where your company qualifies and the directors decide to use the regime, FRS 105 Micro Entity Accounts are the accounts you prepare and file. Where the regime is not available or not chosen, a different framework such as FRS 102 applies instead.

FRS 105 is intended for companies that qualify for the UK micro-entities regime and then choose to apply it. For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of 3 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. Other eligibility rules and exclusions also apply, so meeting the size conditions alone does not guarantee that a company qualifies — some types of company are excluded from the regime altogether. We check eligibility against your company's actual circumstances rather than assuming the regime applies.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company must first meet the eligibility conditions for the regime, and even then the directors can decide whether to apply it. Many qualifying companies do choose FRS 105 because it is simpler and produces shorter accounts, but others prefer FRS 102 — for example where they want a particular accounting treatment, or where a lender, investor or group requires more detail. Choosing the micro-entities regime is a decision best made with the company's wider circumstances in mind rather than by default.

Both are UK financial reporting standards, but they sit at different levels of complexity. FRS 102 is a fuller framework and is widely used by small companies that do not qualify for, or do not choose, the micro-entities regime; it offers more measurement options and requires more disclosure. FRS 105 is a simpler framework available to qualifying micro-entities that choose to apply the micro-entities regime, with shorter notes and fewer accounting options — revaluations, fair value accounting and deferred tax, for example, do not form part of the FRS 105 approach. The right framework depends on eligibility, on who will read the accounts and on what the company needs from them.

Where a company prepares FRS 105 Micro Entity Accounts, those accounts are generally the annual accounts filed with Companies House. The directors must approve the accounts before they are filed, and the filing obligation rests with the company. Filing accounts at Companies House is separate from reporting to HMRC, and it is separate again from the Confirmation Statement, which confirms details such as the company's registered information rather than its financial results. The filing deadline depends on your accounting reference date and whether it is a first period, so it is worth checking the current requirement that applies to your company.

Yes, they are two different documents. FRS 105 Micro Entity Accounts are the company's financial statements for the accounting period, prepared under the micro-entities regime. A Corporation Tax Return (CT600) is a separate submission made to HMRC to report the company's taxable profits and work out what Corporation Tax is due. The two are connected because the figures in the accounts normally inform the tax return, but they have different purposes, different audiences and different deadlines. Preparing FRS 105 accounts does not, by itself, settle the company's Corporation Tax position.

It can, but only if it is eligible for the micro-entities regime and the directors choose to apply it — being newly incorporated is not enough on its own. Eligibility is assessed by reference to the accounting period in question, and where a first accounting period is longer or shorter than a year the size limits are adjusted proportionately. A newly formed company with modest activity may well fall within the limits, but exclusions can still apply. It is sensible to review the position before the first set of accounts is prepared so the correct framework is used from the start.

Companies House has been introducing reforms to the way company accounts are filed, including a move towards software-only filing and changes to what small and micro-entity companies must include in their filed accounts. Because these changes are being phased in, the requirements that apply to your company depend on your accounting period and the guidance in force at the time of filing. Rather than relying on what applied in previous years, we review the position for your specific filing and prepare FRS 105 Micro Entity Accounts with the current requirements in mind. It is worth confirming the latest position before your filing date.