FRS 105 Micro Entity Accounts in Bicester Oxon

FRS 105 is the UK financial reporting standard for micro-entities. It sets out how qualifying companies that adopt the micro-entities regime prepare their annual financial statements, using a simplified historical cost basis and a reduced set of disclosures compared with other UK reporting standards. It covers the format of the profit and loss account and balance sheet, the limited notes required, and the accounting treatments permitted under the framework.

FRS 105 is intended for companies that qualify for the UK micro-entities regime and then choose to apply it. Eligibility depends on the company meeting the relevant size conditions and not being excluded by other rules — for example, certain types of entity are outside the regime regardless of size. Meeting the size thresholds does not automatically guarantee eligibility, and even where a company does qualify, applying the micro-entities regime remains a choice rather than an obligation.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that qualifies may choose to apply it and prepare FRS 105 accounts, or it may instead prepare accounts under a fuller framework such as FRS 102. The decision often comes down to what the directors want from the accounts, whether the company needs to present more detailed information for lenders or investors, and whether any contractual or group requirements point towards a different framework.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of 3 applicable size conditions to fall within the micro-entity thresholds: 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 alongside the wider rules and exclusions that determine whether the micro-entities regime is actually available to a particular company, so it is worth checking your position rather than assuming.

Both are UK financial reporting standards, but they are aimed at different sizes of company. FRS 105 is the micro-entities standard and is deliberately the most streamlined option, with simplified measurement and far fewer disclosures. FRS 102 is the standard used by a much broader range of companies and includes more detailed recognition, measurement and disclosure requirements. For a qualifying micro-entity, FRS 105 typically means shorter, simpler accounts; FRS 102 may be more appropriate where more detail is needed or expected.

Where a company prepares FRS 105 Micro Entity Accounts as its statutory accounts, those accounts normally need to be delivered to Companies House in line with the company's filing obligations, alongside the other information required on the filing. Filing the accounts is a separate action from preparing them, and it is also separate from any Corporation Tax filing made to HMRC. The precise content and format of what is filed depends on the regime applied and the applicable filing requirements.

Yes, they are distinct. FRS 105 Micro Entity Accounts are the company's financial statements, prepared under the micro-entities reporting framework and dealt with as part of the company's accounts obligations. A CT600 is the Corporation Tax Return submitted to HMRC to report the company's taxable profit and work out the tax due. The accounts figures usually inform the tax return, but the two are prepared for different purposes, filed with different bodies, and follow different sets of rules.

In most cases you will need a complete record of the company's transactions for the period, including sales and other income, purchases and expenses, bank statements and reconciliations, details of any loans or finance arrangements, fixed asset purchases and disposals, stock or work in progress where relevant, and information on director's loan account movements and any amounts owed to or by the company. Details of share capital and any dividends paid are also useful. The cleaner and more complete your records, the more straightforward the preparation of the accounts tends to be.

The UK filing framework for small and micro-entity accounts has been under review, with a move towards filing accounts in a digital, more structured format and reduced reliance on abbreviated or filleted information. Because the detail and timing of these changes can affect how accounts are prepared and delivered, it is sensible to check the current position for your own accounting period rather than relying on how filings were handled in previous years. We can talk you through what the changes mean for your company's FRS 105 Micro Entity Accounts.