FRS 105 Micro Entity Accounts in Inverurie

FRS 105 is the UK financial reporting standard that sets out how micro-entity accounts are prepared. It forms part of the financial reporting framework used by companies that qualify for the micro-entities regime and choose to apply it. Compared with other frameworks, FRS 105 is deliberately simplified: it restricts the accounting treatments available, is based largely on historical cost, and requires a shorter set of disclosures. The result is statutory accounts that are easier to prepare and easier to read. FRS 105 Micro Entity Accounts are the company's annual financial statements — they are not a tax return, and they do not replace your Confirmation Statement or any other filing.

FRS 105 is intended for companies that fall within the UK micro-entities regime and decide to apply it. Size is measured against criteria such as turnover, balance sheet total and average number of employees, and certain company types and circumstances are excluded from the regime entirely. Meeting the size tests does not automatically mean a company must, or should, use FRS 105 — it is an available regime, and where a company qualifies it still makes a choice about which framework to apply. Because the exclusions and conditions are not always obvious from the headline thresholds, it is worth checking your specific position before committing.

No. FRS 105 applies when a qualifying company chooses to apply the micro-entities regime. A company that meets the size conditions but prefers a different framework may use another standard instead, and some companies will not be eligible for the micro-entities regime at all. The decision is usually based on the level of detail the directors want in the accounts, the company's structure and activities, and whether any exclusions apply. It is a choice to be made deliberately rather than a default setting, and it can be reviewed as the company grows or changes.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of the following 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. The wording matters — it is 2 out of 3, not all 3, and the thresholds are applied to the relevant accounting period under the applicable rules. Meeting these size conditions is necessary but not always sufficient, because other eligibility rules and exclusions can apply. Companies that are part of a group, or that operate in certain regulated sectors, may find their position is different.

Both are UK financial reporting standards, but they sit at different levels of complexity. FRS 105 is the micro-entities standard and is the more simplified of the two, with restricted accounting treatments and reduced disclosure. FRS 102 is the standard used more widely by small and medium-sized companies and gives more flexibility, including options around fair value and revaluation, alongside more extensive disclosure requirements. A company that no longer qualifies as a micro-entity, or that wants to present its accounts on a fuller basis, would typically move to a framework such as FRS 102 rather than staying on FRS 105. The right framework depends on eligibility and on what the directors want the accounts to show.

Yes. Statutory accounts prepared under FRS 105 are the company's annual accounts, and a limited company is generally required to file them at Companies House for the relevant accounting period, within the filing deadline that applies to that period. It is worth separating this from your other obligations: the accounts filing is not the same as your Corporation Tax Return, and it is not the same as your Confirmation Statement. Preparing the accounts and submitting them are two distinct steps, and both need to be handled. Filing requirements can differ for a company's first period or if the accounting reference date has changed, so check the position that applies to you.

Yes, they are separate obligations. FRS 105 Micro Entity Accounts are the statutory financial statements prepared under the micro-entities regime, filed at Companies House. A CT600 is a Corporation Tax Return submitted to HMRC to report the company's taxable profits and calculate the tax due. The two are connected in the sense that the accounts figures usually inform the tax return, but they are prepared for different purposes and submitted to different bodies, with different rules and deadlines. Preparing one does not automatically take care of the other, so both need to be planned for.

Typically you would need your company's accounting reference date, complete records of income and expenditure for the period, bank and credit card statements, details of any assets owned by the company, information on debtors and creditors at the period end, payroll or employee number information and any relevant loan or lease agreements. If a previous set of accounts exists, that is useful as a starting point. From these records we can build the balance sheet and the notes required under FRS 105. Incomplete records are common and not a barrier — the earlier any gaps are identified, the smoother the preparation tends to be.