FRS 105 Micro Entity Accounts in Neath

FRS 105 is the UK financial reporting standard for micro-entities. It sets out how a qualifying company's financial statements should be prepared when that company chooses to apply the micro-entities regime. It is deliberately simpler than the fuller standards used by larger companies, with fewer disclosures and a more straightforward approach to presenting the balance sheet and related notes. FRS 105 Micro Entity Accounts are the financial statements themselves — they are not a tax return.

FRS 105 is available to companies that qualify for the micro-entities regime and that choose to apply it. Qualifying is about size, but also about the wider rules: certain companies are excluded from the regime regardless of their size, and other conditions can apply. 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 those numbers on their own does not automatically make a company eligible, and eligibility should always be checked against the rules and exclusions that apply to your circumstances.

No. The micro-entities regime is an available accounting regime rather than a mandatory one. A qualifying company can choose whether to apply it. Some companies prefer FRS 105 for its simplicity, while others may have reasons — such as the expectations of lenders, investors or group companies — for using a fuller framework. The key point is that FRS 105 applies when the regime is chosen, not automatically because a company happens to be small.

Both are UK financial reporting standards, but they are aimed at different sizes of company. FRS 105 is the micro-entities standard and is built around a reduced set of disclosures and a simpler presentation. FRS 102 is the standard generally used by small and medium-sized companies that fall outside the micro-entities regime, and it comes with more detailed recognition, measurement and disclosure requirements, including options such as the small companies regime and Section 1A. The right framework depends on your company's size position, any exclusions, and the reporting choices available to it.

Where a company prepares FRS 105 Micro Entity Accounts for a financial year, those accounts normally form the basis of the annual accounts filing for that period, submitted in line with the company's filing obligations. Filing accounts with Companies House is separate from your Corporation Tax obligations, which are dealt with through HMRC. It is also separate from the Confirmation Statement, which confirms company information rather than reporting your financial results. Because filing requirements can vary with company circumstances, it is worth confirming your position for each accounting period.

Yes. FRS 105 Micro Entity Accounts are the company's financial statements, prepared under the micro-entities regime. A CT600 is a Corporation Tax Return submitted to HMRC to report the company's taxable position. They are different documents, going to different recipients, and they serve different purposes — although the figures in each should be consistent with each other and with the underlying records.

A newly incorporated company can consider the micro-entities regime if it meets the relevant eligibility conditions and chooses to apply it. In practice, a first year of trading is often small enough to fall within the size conditions, but that is not guaranteed, and the wider rules and exclusions still need to be checked. If your company is part of a group, has unusual transactions, or has a different reporting history, the position may be less straightforward — which is exactly why it is worth discussing before you prepare your first set of accounts.

Typically we need your year-end bank statements and reconciliations, details of sales and purchases, payroll and director information, records of expenses, details of any assets bought or sold, and any outstanding balances at the year end such as loans, accruals or amounts owed to and by the company. If you have previously prepared accounts, those are helpful too, along with any relevant correspondence from Companies House or HMRC. The more complete and organised your records are, the more efficiently your FRS 105 Micro Entity Accounts can be prepared.

Company accounts filing requirements have been the subject of ongoing reform in the UK, including changes to how accounts are filed and what is expected of companies. Because the detail and the timings matter, and because different companies are affected in different ways, we would rather talk you through the current position for your specific company than give a general summary that may not fit. If you are preparing FRS 105 Micro Entity Accounts, it is a good idea to raise this at the start of the engagement so that your filings are planned around the rules that apply to you.

There is no requirement that FRS 105 Micro Entity Accounts must be prepared by a particular type of professional. What matters is that the accounts are prepared accurately, in line with the micro-entities regime and FRS 105, and that they reflect the company's records. Many directors in Neath choose professional support because the judgment calls — eligibility, presentation, disclosures and consistency with tax filings — are easier to handle with someone who works with these accounts regularly. That said, no accountant or firm can guarantee that Companies House or HMRC will accept a filing or approve a figure; responsibility for the accounts and the filings ultimately rests with the company and its directors.