FRS 105 Micro Entity Accounts in Sussex

FRS 105 is the UK financial reporting standard used to prepare the accounts of qualifying micro-entities. It is designed to be proportionate to the size of a micro-entity, using simpler measurement rules — largely based on historical cost — and requiring far less disclosure than the standards used by larger companies. It sits alongside the micro-entities regime: a company needs to qualify for that regime and choose to apply it, and where it does, FRS 105 governs how the financial statements are prepared.

FRS 105 is intended for companies that qualify for the UK micro-entities regime and decide to apply it. For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of 3 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 conditions is not the whole story, because other eligibility rules and exclusions can apply, and some companies are not eligible for the micro-entities regime at all. It is worth checking your specific position before assuming FRS 105 is available.

No. The micro-entities regime is an available accounting regime rather than a mandatory one. A company that qualifies may choose to apply it, and FRS 105 applies when that choice is made; alternatively, a qualifying company may use a different framework such as FRS 102. The right answer depends on the company's circumstances, its reporting needs and who relies on the accounts, so the decision is best made deliberately rather than by default.

Both are UK accounting standards, but they are aimed at different sizes of entity. FRS 105 is the micro-entities standard: shorter, simpler, largely historical cost based, with minimal disclosure. FRS 102 is the standard generally used by small and larger entities, and it covers more complex areas — such as fair value measurement, deferred tax and a wider range of disclosures — that FRS 105 does not require. In practice, FRS 105 accounts are shorter and more streamlined, while FRS 102 accounts give a more detailed picture. Moving between the two frameworks is possible, but it needs care and should be considered with your accountant.

Where a company prepares its annual accounts under FRS 105, those financial statements typically form the basis of the accounts it delivers to Companies House, subject to the filing rules that apply to that company. Preparing FRS 105 Micro Entity Accounts and delivering them to Companies House are related but separate steps, and the filing itself depends on the company's type, its period dates and current requirements. Some companies also have accounts prepared for other purposes, such as lenders or internal use, which may not be the same document that is filed.

Yes, they are separate obligations. FRS 105 Micro Entity Accounts are the financial statements prepared under the micro-entities framework and are generally filed at Companies House. A CT600 is the Corporation Tax Return submitted to HMRC to report the company's taxable profits and calculate what tax is due. Although the two are linked — your accounts figures usually inform the tax return — they are prepared for different bodies and can follow different rules in places, which is why it helps to have them handled together and clearly distinguished.

It can, provided it qualifies for the micro-entities regime and chooses to apply it. A newly incorporated company will not have a trading history to assess in the usual way, so eligibility is considered using the rules that apply to a company's first accounting period, and the position can change as the business grows. It is worth reviewing the framework at each set of accounts rather than assuming FRS 105 will always be the right fit — crossing a size condition can affect what is available in later periods.

The accounts are built from your company's financial records, so the essentials are bank and credit card statements for the period, sales and income records, purchase and expense information, details of any assets owned or disposed of, and records of any loans, creditors or amounts owed to and by the company. It also helps to know your accounting period dates, whether the company is dormant or trading, and any previous set of accounts. If anything is missing or unclear, we can tell you what is needed and why, so the FRS 105 Micro Entity Accounts are built on a sound footing rather than estimates.

Filing and reporting requirements for small and micro-entities have been reviewed and updated in recent years, and Companies House has been moving towards more digital, software-based filing alongside other changes to company reporting. Because the detail and timing of such changes can vary, and because some reforms are phased in over different periods, it is worth confirming the current position for your company's specific accounting period rather than relying on older guidance. We can talk you through what applies to your FRS 105 Micro Entity Accounts now and flag anything on the horizon that may affect how you file.