FRS 105 Micro Entity Accounts in Nether Poppleton

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It sets out how a qualifying micro-entity recognises, measures and discloses items in its financial statements. Because it is designed for the smallest companies, it strips reporting back to the essentials: a shorter set of primary statements and a much reduced set of notes compared with the standards used by larger businesses. It is part of UK GAAP and is used for statutory accounts prepared for the company's members and filed at Companies House.

FRS 105 is available to companies that qualify for the micro-entities regime and then choose to apply it. Qualification depends on the size conditions and on other rules and exclusions that can apply, so it is not something you can assume simply because your company is small. For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of 3 applicable 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 the size tests alone does not guarantee eligibility, and some companies are excluded from the regime regardless of size.

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 regime is chosen — but an eligible company may instead report under another framework, such as FRS 102 Section 1A for small entities. The choice affects how much detail appears in the accounts and which disclosures are needed. It is worth considering the options before your year end, because switching approach later in the process can create unnecessary work.

Both sit within UK GAAP, but they are aimed at different sizes of company. FRS 105 is the micro-entities standard: it uses simplified recognition and measurement rules and requires far fewer disclosures, and certain items are treated differently — for example, deferred tax is not recognised and revaluation or fair value accounting is generally not permitted. FRS 102 is the standard for small and larger entities, with more detailed recognition, measurement and disclosure requirements, including Section 1A for small companies. In short, FRS 105 gives you less to prepare and less to disclose, but also less flexibility in how items are presented.

Yes. Where a company prepares micro-entity accounts, those financial statements still form part of its statutory filing obligations and need to be filed at Companies House in line with the applicable filing requirements for the company and the period. The accounts must also be prepared for the company's members. Filing the accounts is a separate obligation from filing a Confirmation Statement, and separate again from your Corporation Tax position with HMRC. If you are unsure which accounts format applies to your company or what needs to be submitted, it is worth checking the current guidance or asking us to look at it with you.

Yes, they are two distinct things. FRS 105 Micro Entity Accounts are the financial statements prepared under the micro-entities framework and filed at Companies House. A Company Tax Return, usually filed as a CT600, is a Corporation Tax filing submitted to HMRC and deals with the company's taxable profits, allowances and tax liability. The accounts are normally the starting point for the tax computation, but the profit shown in the accounts is not automatically the taxable profit — adjustments and allowances can change the figure. FRS 105 governs how the accounts are prepared; it does not replace the tax return.

It may be able to, but not automatically. A newly incorporated company has to consider whether it qualifies for the micro-entities regime in its first accounting period, taking account of its turnover, balance sheet total and employee numbers along with the other rules and exclusions that apply. A first period is also often shorter or longer than twelve months, which can affect how the size conditions are assessed. If the regime is available and you choose to apply it, FRS 105 is the framework used for that period's accounts.

We normally need your accounting records for the period, which typically means bank and credit card statements, sales and purchase records, payroll information, details of any equipment or other assets bought or sold, loan and lease information, stock figures where relevant, and your previous year's accounts if there are any. Anything unusual — a one-off transaction, a director's loan, or a change in how something is treated — should be flagged early so it can be considered properly. Good records make the preparation quicker and reduce the number of questions we need to come back to you with.

Company filing requirements do change from time to time, and Companies House has been moving towards structured, software-based filing of accounts alongside other reforms introduced through recent company law changes. Because the detail and timings of these changes can be updated, and because they can affect how accounts are prepared as well as how they are submitted, the safest approach is to check the current Companies House guidance for your period or ask us to confirm what applies to your company. Preparing the accounts on the right basis from the outset is the best way to avoid rework if filing formats change.