FRS 105 Micro Entity Accounts in Pennington

FRS 105 is the UK financial reporting standard for micro-entities. It sets out the recognition, measurement and disclosure requirements that apply when a qualifying company chooses to use the micro-entities regime. It is deliberately streamlined, so the accounts contain a balance sheet, a profit and loss account and a small number of notes, rather than the longer disclosure packages required under fuller frameworks. FRS 105 is a reporting framework, not a tax regime — it governs how the accounts are prepared, not how much tax is payable.

FRS 105 is intended for companies that qualify for the UK micro-entities regime and decide to apply it. Qualifying is about size and about the company's nature: 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. Other rules and exclusions can apply, and some companies are excluded regardless of size, so meeting the thresholds alone does not guarantee eligibility.

No. The micro-entities regime is an available accounting regime, not an obligation. A company that qualifies can choose to apply it — and when it does, FRS 105 is the standard that applies — or it can choose to report under a fuller framework instead. Many qualifying companies opt for FRS 105 because the accounts are simpler and quicker to prepare, while others prefer the additional disclosures of FRS 102 for reasons such as lender expectations or how the figures are used internally. It is a decision worth reviewing each year, because circumstances change.

Both are UK financial reporting standards, but they sit at different levels of complexity. FRS 105 is the micro-entities standard, with reduced disclosure and a more restricted measurement basis. FRS 102 is the standard used by larger small companies and others that do not qualify for, or choose not to use, the micro-entities regime; it permits a wider range of accounting policy choices, such as certain fair value and revaluation options, and requires substantially more disclosure. In short, FRS 105 trades flexibility and detail for simplicity.

Yes, where the company is required to file annual accounts. Companies House filing is a separate obligation from preparing the accounts, and micro-entity accounts filed under FRS 105 are filed in the format that Companies House expects for that regime, including the appropriate statement on the balance sheet. Filing requirements can differ for a company's first period or where a filing deadline has been extended, so it is worth checking your own position rather than assuming a standard pattern applies.

Yes — they are distinct filings with different purposes. FRS 105 financial statements are the company's annual accounts, prepared under the micro-entities reporting framework, and they are filed with 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 closely related because both start from the same underlying records, and the profit figure in the accounts normally feeds into the tax computation, but submitting one does not satisfy the other.

A newly incorporated company can potentially use FRS 105 from its first accounting period if it meets the qualifying conditions and chooses the micro-entities regime. In practice, a new company often has low or no turnover in its first period, but turnover, balance sheet total and employee numbers all need to be considered together, and the other eligibility rules still apply. First-period accounts can also involve specific considerations around the accounting reference date and comparative figures, so it is worth planning the first set of FRS 105 Micro Entity Accounts before the period ends rather than afterwards.

We normally need the company's bookkeeping or accounting records for the period, bank statements and reconciliations, sales and purchase information, payroll or employee details where relevant, details of any loans, hire purchase or leases, stock or work in progress figures if applicable, and the previous year's accounts for comparison. Company details such as the registration number, accounting reference date and registered office address are also needed for the filing. If your records are incomplete, tell us early — it is usually easier to sort out gaps before the accounts are drafted than after.

Companies House filing requirements have been changing, with a move towards filing accounts and other information digitally and in a more structured format, and there are requirements around the balance sheet being prepared and filed in the expected way for the regime used. Because the detail and timing of these changes can affect how accounts are submitted, it is sensible to confirm the current position for your own accounting period before you file, rather than relying on how things were done a few years ago. We can review what your filing currently involves and flag anything that needs attention.