FRS 105 Micro Entity Accounts in Gargrave

FRS 105 is the UK financial reporting standard that applies to micro-entities. It forms part of the micro-entities regime and sets out how a qualifying company's financial statements are prepared, including how items are measured and what disclosures are needed. It is deliberately simpler than the standards used by larger companies: for example, revaluations and fair value accounting are not permitted, and deferred tax is not recognised. The aim is to give very small companies a proportionate reporting framework rather than a cut-down version of a full set of accounts.

FRS 105 is for companies that qualify for the UK micro-entities regime and then choose to apply it. Qualification depends on the size criteria plus a range of other rules and exclusions, so meeting the thresholds alone does not automatically mean a company is eligible. If you are unsure where your company stands, we can review your circumstances and explain which framework is likely to be available to you.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that qualifies can choose to apply it, and FRS 105 applies when that choice is made. A qualifying company might instead prepare its accounts under FRS 102, which involves more detailed recognition, measurement and disclosure requirements. The decision can affect how your accounts look to lenders, investors and others, so it is worth considering deliberately.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of these 3 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, and other eligibility rules and exclusions can apply on top of them, which is why we look at each company's specific situation rather than relying on the thresholds alone.

FRS 102 is the broader UK standard used by most companies, and it includes fair value measurement, revaluations, deferred tax and a much wider set of disclosures — small companies applying FRS 102 typically use the reduced disclosure Section 1A. FRS 105 is narrower and simpler, intended only for micro-entities, with fewer measurement options and less disclosure. In short, FRS 105 produces leaner accounts; FRS 102 produces fuller accounts. Which one suits your company depends on eligibility and on what you want your accounts to show.

Statutory accounts for a limited company are normally filed with Companies House, and for a micro-entity the accounts filed can be prepared on the basis permitted for micro-entities, which is a shortened form of the full financial statements. Filing is a separate step from preparing the accounts, and the timing depends on your company's accounting reference date and filing history. We can handle the preparation and the filing together so nothing is missed.

Yes, they are two different things. FRS 105 Micro Entity Accounts are the financial statements prepared under the micro-entities regime, while a CT600 is the Corporation Tax Return submitted to HMRC. Taxable profits are calculated under tax rules, which can differ from the figures in your accounts — for example in how certain costs or capital items are treated. We can prepare both, but they are separate pieces of work with separate purposes and deadlines.

As a starting point we usually need your bookkeeping or accounting records for the period, bank statements and reconciliations, sales and purchase information, payroll details, records of assets bought or sold, details of any loans, hire purchase or other financing, and stock or work-in-progress figures where relevant. Prior year accounts are helpful too, as they show opening balances and how items were presented previously. If your records are incomplete, we can talk through what is needed and how to get it into shape.

A newly incorporated company can be a micro-entity in its first accounting period if it meets the applicable conditions and is not excluded by any other rule. It also has to choose to apply the micro-entities regime, because FRS 105 is not automatic. First-year accounts often raise questions about what counts towards turnover and how a part-period is treated, so it is worth discussing your position early rather than at the filing date.

Filing requirements for small and micro-entity accounts have been the subject of reform in recent years, and the detail of what must be filed with Companies House can change over time. Rather than relying on guidance you may have read elsewhere, it is worth checking the position that applies to your company's specific accounting period. We keep track of the requirements and will explain clearly what your filed accounts need to include.