FRS 105 Micro Entity Accounts in Rainham

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It sets out how qualifying micro-entities measure and present the items in their annual financial statements. Compared with the frameworks used by larger companies, it is deliberately streamlined: fewer disclosure notes, a narrower set of accounting policy choices, and simpler measurement. The accounts produced under it are what we refer to as FRS 105 Micro Entity Accounts, and they typically take the form of a balance sheet with supporting notes, alongside the profit and loss account used for the company's own reporting. FRS 105 sits within the wider set of UK accounting standards and exists to reduce the reporting burden on the smallest qualifying companies.

FRS 105 can be used by companies that qualify for the micro-entities regime and then choose to apply it. Qualification depends on the size conditions and on the eligibility rules and exclusions that sit alongside them — being a small company is not the same as being a micro-entity, and not every company that meets the size conditions can use the regime. Directors should check the position for the specific accounting period before assuming FRS 105 applies. If your company is in Rainham and you are unsure whether the micro-entities regime is available to you, we can review your circumstances and explain your options.

No. The micro-entities regime is an optional accounting regime. A company that qualifies as a micro-entity may choose to apply it and prepare FRS 105 Micro Entity Accounts, or it may prepare accounts under a different framework, such as FRS 102 Section 1A for small companies. What matters is that the framework chosen is appropriate and applied consistently. Some companies prefer FRS 105 for its simplicity and shorter disclosures; others prefer a fuller framework where more detail is wanted by lenders, investors or other users of the accounts. FRS 105 applies when the micro-entities regime is the regime selected for that period.

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 during the period. These are the size conditions, and meeting two of them does not by itself guarantee that a company can use the micro-entities regime. The wider eligibility rules and exclusions also need to be satisfied, and the conditions must be considered in relation to the correct accounting period. Because the position can be affected by company-specific factors, it is worth confirming before the accounts are prepared.

FRS 105 and FRS 102 are both UK accounting standards, but they are aimed at different sizes of company. FRS 105 is the micro-entities standard and provides a simpler basis of preparation, with fewer accounting policy options, less use of fair value measurement and a much shorter set of disclosures. FRS 102, including Section 1A for small companies, allows more flexibility and calls for more detailed reporting. The practical differences can show up in the numbers themselves, because certain items may be treated more simply under FRS 105 than under FRS 102. The choice between them is a decision about the framework for the accounts rather than a change to how the business is run.

Yes. Where a company prepares FRS 105 Micro Entity Accounts, those accounts form the basis of its annual accounts filing at Companies House. The exact filing requirements and deadlines depend on the company's circumstances, such as whether it is filing its first accounts or accounts for an established period. The version placed on the public register is normally the balance sheet with its notes, and the profit and loss account is generally omitted from the filed copy where the relevant filing exemption applies. Companies House does not approve or endorse accounts; it receives and registers them. Responsibility for making sure the accounts filed are complete and prepared on the correct basis rests with the company.

Yes — they are two distinct pieces of work. FRS 105 Micro Entity Accounts are the financial statements prepared under the micro-entities regime, while the Corporation Tax Return (CT600) is the tax filing submitted to HMRC. The CT600 starts from the company's taxable profits, which are not always the same as the profit shown in the accounts, because tax rules on allowable expenses, capital allowances, disallowable items and losses can adjust the figures. Filing accounts at Companies House does not settle your Corporation Tax position, and submitting a CT600 does not replace the accounts filing. Both need to be handled, and they should tell a consistent story.

A complete set of records covering the accounting period is the starting point. In practice that usually means bookkeeping or accounting software reports, bank and credit card statements, sales and purchase invoices, details of any loans or finance agreements, a list of assets owned and any disposed of during the period, payroll information including employee numbers, VAT records where relevant, details of director's loan movements and share capital, and the previous year's accounts for comparison. If some of that is missing, figures can often be reconstructed from bank records, but having the information ready makes preparation smoother. We will confirm exactly what is needed once we understand how your company operates.