FRS 105 Micro Entity Accounts in Blackbrook

FRS 105 is the UK financial reporting standard for micro-entities. It sets out how qualifying companies that choose to apply the micro-entities regime should prepare their financial statements — what to include, how to measure items, and which disclosures are required. It is a simplified, largely historical-cost based standard, which is why micro-entity accounts look shorter and more straightforward than accounts prepared under standards aimed at larger companies. FRS 105 is the reporting framework; the micro-entities regime is the legal regime that permits its use.

FRS 105 is available to companies that qualify as micro-entities and that choose to apply the micro-entities regime. Qualification depends on the size conditions plus other eligibility rules — certain company types and circumstances are excluded, and there can be additional considerations where a company is part of a group. Meeting the size tests on their own does not automatically mean a company is eligible, and eligibility should be considered alongside whether the regime is actually beneficial, since FRS 105 does not permit some of the accounting treatments that other standards allow.

No. Qualifying for the micro-entities regime does not mean you must use it. It is an available regime, and applying it is a choice made by the company. If a company qualifies but the directors prefer a different basis — for example because of a group relationship, a lender's preference, or the way certain transactions need to be presented — another standard can be used instead. This is why preparation usually starts with a review of the company's circumstances and the directors' intentions rather than with a template.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of the 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. These conditions sit within a wider set of rules, and exclusions can apply regardless of size. It is also important to check the position for earlier periods, since different limits applied then. Because the tests are applied to your own figures and circumstances, it is worth confirming the position for your company rather than relying on general figures.

Both are UK financial reporting standards, but they are aimed at different sizes of company. FRS 105 applies to qualifying micro-entities and is the most simplified option, with reduced disclosure and a narrower set of permitted accounting treatments. FRS 102 is the standard for larger entities and, in its small-entity form, is used by many small companies that do not use — or cannot use — the micro-entities regime. In broad terms, FRS 102 gives greater flexibility in some areas but comes with more disclosure and more complexity, while FRS 105 trades that flexibility for simplicity.

Companies that prepare accounts under FRS 105 will normally need to file accounts with Companies House for each financial year, unless a specific exemption applies to that company. Micro-entity accounts can be filed in the simplified format the regime allows, but the filing itself is a legal obligation that runs separately from the preparation work. Filing with Companies House does not mean the accounts have been checked, approved or endorsed by Companies House — responsibility for their content rests with the directors.

Yes, they are two distinct things. FRS 105 Micro Entity Accounts are the financial statements prepared under the micro-entities regime and filed at Companies House. A CT600 is a Corporation Tax Return submitted to HMRC, and it is based on your taxable profits after tax adjustments — not on the accounts format. The two are connected because the accounts usually provide the starting point for the tax computation, but they are prepared for different purposes and sent to different bodies, with different requirements and timescales.

In most cases we need your bookkeeping or accounting records for the period, bank and credit card statements, details of sales and purchases, payroll information if you employ staff, a list of assets with purchase dates and costs, any loan or finance agreements, and the previous year's accounts if there are any. Supporting documents such as invoices and receipts help confirm the figures. If your records are incomplete, tell us — it is far better to flag gaps at the start than to discover them partway through preparation, as missing information is the most common reason accounts take longer than expected.