FRS 105 Micro Entity Accounts in Welling

FRS 105 is the UK financial reporting standard that applies to the micro-entities regime. It sets out how a qualifying micro-entity should measure and present items in its financial statements and which disclosures must be included in the notes. It is deliberately the lightest of the UK accounting frameworks, with simplified measurement rules and reduced disclosure compared with the standards used by small and larger companies. Where a company chooses the micro-entities regime, FRS 105 is the standard its accounts must follow.

FRS 105 is available to companies that fall within the UK micro-entities regime and decide to apply it. Being small is not the same as being a micro-entity, and the regime also excludes certain types of entity and situations, so eligibility needs to be checked against the company's own facts rather than assumed. A company that qualifies is not obliged to use the regime — it can report under a different framework instead. We can look at your company's position and confirm whether FRS 105 appears to be open to you.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A qualifying company may choose to apply it, and if it does, FRS 105 is the standard that governs those accounts. Many qualifying companies do use it because the reporting is simpler and more proportionate, but others prefer a framework that offers more accounting options or a fuller set of disclosures. The choice is a reporting decision for the company, and it should be made with an eye on lenders, investors and anyone else who relies on the accounts.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of the following 3 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 a starting point rather than the whole test — the micro-entities regime has its own rules and exclusions, and some entities are not eligible regardless of size. It is also worth checking your position carefully if your company is close to a threshold or has had an unusual year.

Both are UK financial reporting standards, but they are aimed at different sizes of company. FRS 105 sits behind the micro-entities regime and offers simplified measurement — for example, it does not permit revaluation or fair value accounting in the way larger frameworks do, and it requires far fewer notes. FRS 102 is the standard applied by most small and medium-sized companies, and Section 1A of FRS 102 is the small companies' variant, which brings more disclosure and more accounting choices but also more flexibility. Choosing between them is really a question of which regime your company fits and how much detail you want in your accounts.

Where a company is required to file annual accounts, those accounts — prepared under whichever framework it applies, including FRS 105 — are delivered to Companies House as part of its statutory filing obligations. The accounts are the same financial statements the company prepares for its members; filing is the step that puts them on the public record. What must be filed, and in what format, can depend on the type of company and the filing route used, and Companies House has been moving towards structured, software-based filing. We can talk you through what applies to your company.

Yes, they are two distinct things. FRS 105 Micro Entity Accounts are the company's financial statements, prepared under the micro-entities regime. A CT600 is the Corporation Tax Return submitted to HMRC to report the company's taxable profit and calculate the tax due. The CT600 is prepared using figures derived from the accounts, but it is a separate filing with different rules, adjustments and deadlines. Preparing tidy FRS 105 accounts generally makes the tax return easier to put together, but the accounts themselves do not satisfy the Corporation Tax filing obligation.

We work from your company's own records for the accounting period. In practice that usually means bank and credit card statements, sales invoices and receipts, purchase invoices and expense records, payroll information if you employ people, details of any assets bought or sold, loan and director's loan account movements, stock or work in progress figures where relevant, and the previous year's accounts for comparison. If you use accounting software, granting access to that is often the quickest route. Anything you can provide about unusual or one-off transactions in the period is especially helpful, as it helps us reflect them correctly.

Companies House has been reforming how accounts are filed, with a shift towards accounts being submitted in a structured, software-generated format rather than as simple documents, and a narrowing of the abbreviated and filleted filing options that some companies have used in the past. These changes are being introduced in stages, and the practical effect depends on your company's year end and filing route. If you want to understand how the direction of travel might affect your FRS 105 Micro Entity Accounts in Welling, it is worth reviewing your current arrangements now rather than shortly before a filing is due.