FRS 105 Micro Entity Accounts in Kingston upon Hull

FRS 105 is the financial reporting standard that applies to companies using the UK micro-entities regime. It is the most simplified accounting framework available to a qualifying limited company, built around a balance sheet, a small number of notes and straightforward measurement principles, with far fewer disclosures than the fuller UK accounting standards. FRS 105 does not apply to every small company — it applies when a company both qualifies for the micro-entities regime and chooses to use it.

FRS 105 is intended for companies that qualify for the micro-entities regime and decide to apply it. For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of 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. Meeting those size conditions is not the whole picture, because certain company types and circumstances are excluded and other eligibility rules can apply. Eligibility is therefore best confirmed case by case rather than assumed.

No. Qualifying for the micro-entities regime does not force a company to use it. The regime is available rather than mandatory, and a qualifying company may instead choose to prepare its accounts under a fuller framework such as FRS 102. FRS 105 applies only when the micro-entities regime is actually chosen. Directors usually weigh up simplicity and reduced disclosure against the needs of lenders, investors, group companies or anyone else who relies on the accounts when deciding which route suits them.

Both sit within UK accounting standards, but they are aimed at different levels of complexity. FRS 102 is the fuller framework used by a much wider range of companies and includes more detailed measurement requirements and considerably more disclosure. FRS 105 is deliberately minimal: it is designed for companies using the micro-entities regime, with a simpler balance sheet-led format and a much shorter set of notes. Because the two frameworks can produce different figures, moving from one to the other is a decision worth taking advice on rather than treating as a formality.

Preparing accounts under FRS 105 and filing them are two separate steps. Where a company prepares micro-entity accounts for a financial year, those accounts form the basis of the statutory accounts filing made at Companies House, usually in a simplified format centred on the balance sheet and supporting notes. The submission itself is a Companies House filing obligation, and the format and content requirements for small and micro-entity filings have been changing, so it is worth checking what applies to your specific accounting period before you submit.

Yes. FRS 105 accounts are the statutory financial statements prepared under the micro-entities regime, while the CT600 is the Corporation Tax Return submitted to HMRC. They are separate filings with separate purposes, even though both draw on the same underlying financial records. Preparing FRS 105 accounts does not, on its own, deal with your Corporation Tax obligations, and filing a CT600 does not satisfy your Companies House accounts filing duty. Many companies need both, alongside a Confirmation Statement, so it helps to treat them as distinct tasks within the same year-end process.

In practice we need a clear picture of the company's financial activity for the period. That usually means bookkeeping or accounting records, bank statements, sales and purchase information, payroll details, records of asset purchases and disposals, details of any loans or shareholder balances, stock or work-in-progress figures where relevant, and a copy of the previous year's accounts if there are any. If your records are incomplete or held in a mix of spreadsheets and software, tell us at the outset — it is often quicker to sort that out before preparation begins than part-way through.

A newly incorporated company can potentially prepare its first set of accounts under FRS 105, provided it qualifies for the micro-entities regime and the directors choose to apply it. Size conditions are assessed in line with the relevant rules, and a first accounting period can bring its own considerations, particularly if the company is part of a group, has more complex transactions, or expects to grow quickly. It is worth reviewing the position before the first year end rather than after the accounts have been drafted.

Filing requirements for small and micro-entity accounts have been evolving, with Companies House moving towards greater use of digital, software-based filing and changes to what is expected of small company accounts being phased in. The detail and timing can depend on your accounting period, so the sensible approach is to confirm the current position for your specific filing rather than rely on how things worked a few years ago. We keep this in mind when preparing FRS 105 Micro Entity Accounts so that the figures are ready for the format they need to be submitted in.