FRS 105 Micro Entity Accounts in Alton

FRS 105 is the financial reporting standard that supports the UK micro-entities regime. It sets out how a qualifying micro-entity prepares and presents its annual financial statements when it chooses to apply that regime — covering the format of the balance sheet and profit and loss account, the measurement rules and the limited notes required. It is a simplified framework designed for the smallest companies, which is why the resulting accounts tend to be shorter and more straightforward than those prepared under a fuller standard.

FRS 105 is intended for companies that fall within the legal definition of a micro-entity and that choose to apply the micro-entities regime. Meeting the size conditions is usually the starting point, but other eligibility rules and exclusions can apply — for example, certain company types and entities are not able to use the regime regardless of their size. Because of this, eligibility should be confirmed against your company's specific facts before the regime is adopted, rather than assumed.

No. Qualifying for the micro-entities regime does not oblige a company to use it. Applying the regime is a choice, and if a company decides not to, it would typically prepare accounts under another applicable framework, such as FRS 102. Many directors opt for FRS 105 because the reporting is simpler, but the decision should take account of the company's circumstances — including its structure, transactions and 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 3 applicable size conditions to qualify as a micro-entity: 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 conditions sit alongside other rules and exclusions, so satisfying two of the three thresholds does not guarantee that a company is eligible in every case.

FRS 102 is the standard used more broadly by small and medium-sized entities, and it allows for greater use of fair value and includes wider recognition, measurement and disclosure requirements. FRS 105 is the micro-entities standard, and it is deliberately more limited — it applies simpler measurement rules and requires far fewer notes. Choosing between them usually comes down to whether the company qualifies for the micro-entities regime, whether it wants that level of simplification, and whether the extra detail available under FRS 102 would be useful.

Where a company prepares accounts under the micro-entities regime, those financial statements still need to be filed with Companies House as part of its annual accounts obligation, unless a specific exemption applies to that company. Filing the accounts is a separate step from preparing them, and separate again from your Corporation Tax position. The accounts that go to Companies House should match what the directors have approved and what has been reported.

Yes — they are two different things. FRS 105 Micro Entity Accounts are the company's financial statements, prepared under the micro-entities reporting framework and filed with Companies House. A CT600 is the Corporation Tax Return submitted to HMRC to report the company's taxable profits and calculate the tax due. The figures in the two documents are related, because the accounts usually form the starting point for the tax computation, but the filings themselves serve different purposes and go to different bodies.

Possibly, but not automatically. A newly incorporated company still has to meet the micro-entity size conditions and satisfy the other eligibility rules for the relevant period, which in the first year of trading may mean looking carefully at the figures and any part-period considerations. If you are setting up a company in Alton and expect it to stay small, it is worth discussing the likely framework early so that your bookkeeping and records are set up in a way that makes preparing FRS 105 Micro Entity Accounts straightforward.

Typically we would ask for your bookkeeping or accounting records for the period, bank and credit card statements, sales and purchase information, payroll details including employee numbers, any loan or finance agreements, details of assets held and any stock or work in progress at the period end. We may also need information about share capital, dividends paid and any related party transactions. The exact list depends on what the company does, and we will confirm what is relevant once we understand your circumstances.