FRS 105 Micro Entity Accounts in Newark

FRS 105 is the UK financial reporting standard that governs how micro-entity accounts are prepared. It sits alongside the micro-entities regime, which is a simplified accounting framework for qualifying companies. Where a qualifying company chooses to apply that regime, FRS 105 is the standard used to produce its financial statements. In practice it means a shorter balance sheet, a simplified profit and loss account presentation, and far fewer disclosure notes than you would see under FRS 102, with the accounts generally prepared on a historical cost basis.

FRS 105 is intended for companies that qualify for the UK micro-entities regime and then choose 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 tests is not the whole story, however — other eligibility rules and exclusions apply, so some companies that appear small enough may still not be able to use the regime. It is worth checking your position properly before deciding.

No. The micro-entities regime is an available option, not a requirement. A company that qualifies can generally choose to apply it and prepare FRS 105 accounts, or it may instead prepare accounts under a different framework such as FRS 102. The right choice depends on the company's circumstances, its transactions, and what the directors need from the accounts. Some companies stay on a fuller framework because of group relationships, financing arrangements, or the level of detail they want to report.

FRS 102 is the wider UK financial reporting standard used by a broad range of companies, while FRS 105 is a much more streamlined framework available only to qualifying micro-entities that choose it. FRS 105 accounts generally include fewer notes and simpler measurement rules, often making them quicker and less costly to prepare. FRS 102 allows more accounting policy choices — for example around fair value and certain financial instruments — and requires considerably more disclosure. In short, FRS 105 trades flexibility and detail for simplicity.

Most companies with a filing obligation must send annual accounts to Companies House, and where a company has prepared FRS 105 Micro Entity Accounts, those accounts can form the basis of that filing. The exact content of the filed copy depends on the framework applied and the company's circumstances, and small companies may be able to file a reduced set of information. Filing accounts is a separate obligation from filing a Corporation Tax Return, so it is important not to treat one as covering the other.

Yes, they are two distinct exercises. FRS 105 Micro Entity Accounts deal with financial reporting — how the company's results and position are presented in its accounts, and how those are filed at Companies House. A CT600 is a Company Tax Return submitted to HMRC to report the company's taxable profits and calculate the Corporation Tax due. The accounts usually provide the starting point for the tax computation, but the CT600 is prepared and submitted separately, and the two can have different deadlines.

A newly incorporated company can use FRS 105 if it qualifies for the micro-entities regime and the directors choose to apply it — being newly formed is not a barrier in itself. The size conditions are assessed against the relevant rules for the period, and a company in its first period of trading will often sit well within the thresholds. That said, eligibility depends on the company's own circumstances and the applicable exclusions, so it is sensible to confirm the position before assuming FRS 105 is the right framework for your first set of accounts.

Typically you would provide your bookkeeping or accounting records for the period, bank statements and reconciliations, sales and purchase documentation, payroll information, details of any fixed assets and borrowings, and records of any directors' loans or other balances with the company. It also helps to know your accounting period dates, your previous year's figures if you have traded before, and whether there have been any significant one-off transactions. The more complete and organised your records are, the more straightforward the preparation of your FRS 105 Micro Entity Accounts tends to be.

The rules around company size thresholds and accounts filing have been under review, and the micro-entity size limits have been updated for accounting periods beginning on or after 6 April 2025, with the current conditions based on turnover, balance sheet total, and average employee numbers. Companies House has also been moving towards greater digital filing requirements, which can affect how accounts are submitted. Because the detail matters and applies differently depending on your year end, it is worth reviewing your position each year rather than assuming last year's approach still fits.