FRS 105 Micro Entity Accounts in Romiley

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It is the shortest and simplest of the statutory accounting frameworks, offering streamlined balance sheet and profit and loss formats along with much reduced disclosure compared with fuller standards. In practice, FRS 105 financial statements are shorter, easier to read and less costly to prepare, but they also give less detail to lenders, investors and other readers than accounts prepared under a fuller framework.

FRS 105 is intended for companies that qualify for the micro-entities regime and then choose to apply it. Qualifying depends on the size tests set out in company law as well as a range of other eligibility rules and exclusions — for example, certain types of company and certain regulated activities are not able to use the regime. Meeting the size thresholds on their own does not automatically mean a company qualifies, and qualifying does not automatically mean it must use FRS 105. It is a choice, and it is worth checking your position before deciding.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of 3 applicable size conditions to fall within the micro-entity thresholds: 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 figures sit alongside wider eligibility rules and exclusions, so satisfying two of the three conditions is a starting point rather than a guarantee. Companies with periods beginning before that date fall under the earlier criteria.

Both are UK financial reporting standards, but they serve different sizes of company. FRS 105 is the micro-entities framework, with simplified formats and minimal disclosure. FRS 102 is the fuller standard used by small, medium and larger entities, and it generally requires more detailed measurement work, more notes and a longer set of financial statements. FRS 102 also offers a Section 1A variant for small entities, which sits between the two in terms of complexity. The framework you apply affects how your figures are presented and how much information is disclosed, so the choice is worth making deliberately.

Yes. Where a company prepares FRS 105 Micro Entity Accounts as its statutory accounts, those financial statements normally need to be filed with Companies House as part of the company's annual accounts filing obligation, alongside any other documents required for that period. Filing the accounts is a separate step from preparing them, and it is also separate from the company's Corporation Tax obligations. If you are unsure what your company needs to submit, we can talk you through the position for your circumstances.

Yes — they are two different things. FRS 105 Micro Entity Accounts are the statutory financial statements prepared under the micro-entities accounting framework. A CT600 is a Corporation Tax Return submitted to HMRC, which sets out the company's taxable profits and the tax due for the period. The accounts often provide the starting point for the tax computation, but the two are prepared for different purposes, go to different recipients, and follow different rules. Preparing one does not automatically complete the other.

It can, in principle, if it qualifies for the micro-entities regime in its first accounting period and chooses to apply it. Newly incorporated companies often fall comfortably within the size thresholds, but eligibility depends on the full set of rules rather than size alone, and there are exclusions that can catch certain companies from the outset. It is also worth thinking about the longer term — if you expect rapid growth, a framework that better suits a larger company may be a more sensible starting point.

At a minimum, we need complete bookkeeping records for the period, bank and credit card statements, sales invoices and purchase receipts, details of any assets owned such as equipment or vehicles, information on loans, directors' loans and other liabilities, and stock or work-in-progress figures where relevant. Payroll records help confirm employee numbers, and details of any share capital or dividends paid are useful too. If you have previous accounts or a trial balance, send those as well — the clearer your records, the more straightforward the preparation process tends to be.

Company filing requirements do change from time to time, and proposals around the format and method of filing accounts have been discussed in recent years. Rather than relying on a summary, it is sensible to confirm the current position for your own accounting period before you file. We monitor developments affecting FRS 105 Micro Entity Accounts and will tell you what is relevant to your company, so you are not caught out by a change in what Companies House expects to receive.