FRS 105 Micro Entity Accounts in Sunderland

FRS 105 is the UK financial reporting standard for micro-entities. It sets out the accounting rules that apply when a qualifying company chooses to use the micro-entities regime, allowing a simplified set of financial statements to be prepared. Compared with the standards used by larger companies, FRS 105 involves fewer measurement options and reduced disclosure, which makes the accounts shorter and, for many small companies, easier to follow.

FRS 105 is intended for companies that qualify as micro-entities and that choose to apply the micro-entities regime. 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 the size conditions is not the whole picture, however — other eligibility rules and exclusions can apply, and some company types are not able to use the regime at all. Eligibility should therefore be checked against your specific circumstances rather than assumed.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that qualifies as a micro-entity can choose to apply it, and FRS 105 applies when that choice is made. A qualifying company may instead prepare its accounts under a different framework, such as FRS 102. The right decision depends on the company's size, ownership, activities and reporting needs, which is why it is worth discussing before you commit to an approach.

FRS 102 is the fuller UK financial reporting standard used by many small and medium-sized companies, and it permits more accounting policy choices and requires more disclosure than FRS 105. FRS 105 is deliberately narrower: it is built for micro-entities and uses a simplified historical cost basis with markedly reduced disclosure. In practice, FRS 105 accounts are usually shorter and more streamlined, while FRS 102 accounts typically provide more detail and flexibility. Which standard is appropriate depends on whether your company qualifies for and chooses the micro-entities regime.

Yes — where FRS 105 accounts are prepared as the company's annual accounts, they form the basis of the accounts filed at Companies House in the normal way. The accounts must still be prepared and filed in line with the applicable rules on format, content and filing, even though the disclosure requirements are reduced compared with larger-company standards. Filing the accounts is separate from the company's other obligations, such as its Confirmation Statement.

Yes, they are two distinct things. FRS 105 accounts are the company's financial statements, prepared under the micro-entities framework and generally filed at Companies House. A CT600 is a Corporation Tax Return submitted separately to HMRC to report the company's taxable profits and calculate the tax due. The figures in the accounts often inform the tax return, but the documents serve different purposes, go to different bodies, and follow different rules — so it helps to keep them clearly separated in your records and your calendar.

A newly incorporated company may be able to use FRS 105 if it qualifies as a micro-entity and chooses to apply the micro-entities regime. In the first period, some of the size conditions are looked at differently because there is no prior-year comparison, and a company with limited activity will often fall comfortably within the size limits. That said, the wider eligibility rules and exclusions still apply, so it is worth confirming the position for your company rather than assuming the regime is available because the business is new and small.

In broad terms, you will need to provide the records that support the figures: bookkeeping or accounting records, bank and payment platform statements, sales and purchase information, payroll details if you employ staff, and records of assets, liabilities, loans and director balances. If you are switching from another framework or from another accountant, prior-year accounts and trial balance information are also helpful. Having these ready in an organised form makes preparation smoother and reduces the chance of queries or delays partway through the process.

Company filing requirements do change from time to time, including the way accounts are submitted and the level of detail expected, and there have been developments around making accounts filing more digital and more consistent. Because the rules can shift, and because the size conditions themselves were updated for accounting periods beginning on or after 6 April 2025, it is sensible to check the current position for your accounting period rather than relying on older guidance. We can help you understand what is relevant to your company at the point you prepare your FRS 105 Micro Entity Accounts.