FRS 105 Micro Entity Accounts in Addlestone

FRS 105 is the UK financial reporting standard for micro-entities. It sets out how qualifying companies that choose the micro-entities regime measure and present items in their financial statements. Compared with fuller frameworks, it is deliberately simpler: fewer accounting policy choices, fewer notes, and a more compact balance sheet and profit and loss account. It is an accounting and reporting framework, not a tax regime, so choosing FRS 105 does not by itself change how your company is taxed.

FRS 105 is available to companies that qualify for the UK micro-entities regime and then choose to apply it. Qualification depends on meeting the size criteria and not falling within any of the exclusions that apply to the regime, which can include certain types of company or group. Meeting the size thresholds alone does not automatically mean you qualify, and even if you do qualify, using FRS 105 remains a choice. If a company prefers, or is required, to report under a different framework, FRS 102 or another standard will apply instead.

No. FRS 105 is an available regime rather than a mandatory one. A company that qualifies as a micro-entity normally has the option of applying the micro-entities regime; if it does, FRS 105 governs how the accounts are prepared. A qualifying company may instead choose to prepare accounts under a fuller framework such as FRS 102, particularly where a lender, investor or group parent wants more detail. The decision is normally taken with reference to the company's circumstances and who will be reading the accounts.

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. These are the headline size tests, and other rules and exclusions in the regime can still affect whether a particular company qualifies. Because eligibility depends on your own figures and circumstances, it is worth checking your position rather than assuming.

Both are UK financial reporting standards, but they sit at different levels of complexity. FRS 105 is the micro-entities standard: minimal disclosures, simpler measurement rules and a short-format set of financial statements. FRS 102 is the standard applied by larger or non-micro companies, and it generally requires more detailed accounting treatments, more judgements and a fuller set of notes. Choosing between them is largely a question of which regime your company qualifies for and which framework best suits the people who rely on the accounts.

Where a company prepares accounts under the micro-entities regime, those accounts normally need to be filed at Companies House in line with its filing obligations, using the appropriate filing route. The accounts that are filed may be a simplified version of what you prepare internally, and there are rules about what must be included. Filing accounts is a separate obligation from submitting a Corporation Tax Return, and the two are handled through different channels and on different bases.

Yes, they are separate. FRS 105 Micro Entity Accounts are financial statements prepared under the micro-entities reporting framework and filed at Companies House. A CT600 is a Corporation Tax Return submitted to HMRC, which calculates the company's tax position for the period. The figures in your accounts usually inform the tax return, and the two are prepared alongside each other in practice, but they serve different purposes, go to different bodies and are governed by different rules. One does not replace the other.

A newly incorporated company can potentially use the micro-entities regime if it meets the relevant size conditions and does not fall within an exclusion — many first-year companies are small enough to do so. However, eligibility still has to be assessed on the company's own circumstances, and a first set of accounts sometimes raises practical questions, such as how to treat start-up costs, director's loans or share capital. It is sensible to confirm the position early in the accounting period rather than at the point of filing.

In practice, we usually need your bank statements for the full period, sales and purchase records, expense and receipt information, payroll or director's pay details, and any records of assets, liabilities, loans or share capital. If you use accounting software, a read-only or accountant's copy of the ledger is often the fastest route. If records are incomplete, tell us — it is usually better to identify the gaps at the outset than to work around them later, and we can explain what is missing and how best to fill it in.

Company filing requirements do change over time, with a move towards filing accounts in a more structured, digital format for many companies. Rather than relying on general commentary or old guidance, it is worth confirming the current position for your own accounting period and company type. We can talk you through what applies to you now, and flag anything that may affect how your FRS 105 Micro Entity Accounts are prepared or submitted in future periods.