FRS 105 Micro Entity Accounts in Camborne

FRS 105 is the UK financial reporting standard for micro-entities. It sets out how a qualifying company that has chosen to apply the micro-entities regime prepares its annual financial statements. Compared with the standards used by larger companies, it keeps measurement simple — broadly historic cost — and requires far fewer disclosure notes, which makes the accounts shorter and more streamlined. It is one of the standards that sits under UK GAAP, alongside FRS 102.

FRS 105 is intended for companies that both qualify for the micro-entities regime and choose to apply it. Qualification is based on size conditions plus other eligibility rules and exclusions, so meeting the size tests on their own does not automatically mean a company can or should use the regime. Companies outside the regime — for example public companies and certain regulated entities — cannot apply FRS 105, and charities follow separate rules. We look at your specific circumstances before confirming that FRS 105 Micro Entity Accounts are appropriate.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that qualifies can decide to apply it, in which case FRS 105 applies to the accounts, or it can choose a different framework such as FRS 102 instead. The choice may be influenced by what lenders, investors or other users of the accounts expect to see, and by whether the directors want the extra options and disclosures a fuller framework provides. Once a framework is selected it should be applied consistently.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least two of 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 are the headline size tests. Other rules and exclusions also apply, and the assessment relates to the relevant financial year, so it is worth checking your position rather than assuming you qualify.

FRS 102 is the main UK GAAP standard for entities that are not applying the micro-entities regime, with a separate section for small entities. FRS 105 is a simplified standard available only to qualifying micro-entities. The practical differences include reduced disclosure requirements under FRS 105 and the removal of certain accounting options — for example, revaluations and fair value measurement are not available — along with no requirement to account for deferred tax. FRS 102 offers more choice and flexibility but also asks more of the preparer.

Yes, in the normal course. Micro-entity accounts prepared under FRS 105 are generally filed at Companies House as the company's annual accounts once they have been prepared and approved by the directors, and the filing must be made using the correct accounts filing route. Filing the accounts is separate from telling HMRC about your taxable profits, and neither body reviews or approves the accounts in advance of filing. It is the directors' responsibility to ensure the right documents are submitted on time.

Yes, they are two distinct filings. FRS 105 Micro Entity Accounts are the company's financial statements, prepared under the micro-entities regime and normally filed at Companies House. A CT600 Corporation Tax Return is submitted separately to HMRC and calculates the tax due on the company's taxable profits, which involves adjustments that do not appear in the accounts themselves. The accounts usually form the starting point for the return, but completing one does not complete the other.

It may be able to, provided it meets the micro-entity conditions and any other eligibility rules for its first accounting period and chooses to apply the regime. A newly incorporated company has no prior year of trading to compare against, so the assessment focuses on the period in question and the specific rules that apply to first-year companies. If you have recently started trading in Camborne, we can review your position and talk through whether FRS 105 Micro Entity Accounts are suitable from the outset.

We typically need your bookkeeping or a summary of income and expenses, bank and credit card statements for the full period, sales and purchase invoices, details of any assets bought or sold, stock or work in progress figures, loan and director's loan balances, share capital information and any previous accounts or filings. If you use accounting software, we can often work directly from it. The clearer and more complete your records, the more straightforward the preparation tends to be.

There are ongoing reforms to UK company filing requirements, including measures aimed at moving accounts filing to software-based routes and requiring small and micro companies to provide more information, such as profit and loss figures, than has historically been the case. These changes have been consulted on and introduced in stages, so the detail and timing can shift. It is sensible to check current Companies House guidance, and we can talk you through what any changes are likely to mean for your FRS 105 Micro Entity Accounts.