FRS 105 Micro Entity Accounts in Ampthill

FRS 105 is the UK financial reporting standard that applies when a qualifying company chooses to use the micro-entities regime. It provides a simplified basis for preparing financial statements, with lighter measurement requirements and far fewer disclosures than a fuller framework such as FRS 102. In practice, accounts prepared under FRS 105 typically include a balance sheet, a profit and loss account and a small number of notes, and in many cases a more abbreviated version can be filed. FRS 105 is purely about accounting and reporting. It does not determine how much Corporation Tax is payable, and it does not replace a CT600.

FRS 105 is intended for companies that qualify as micro-entities under the UK regime and that choose to apply it. Qualifying means meeting the applicable size conditions and not falling within any of the exclusions that can rule a company out regardless of its size. It is worth stressing that qualifying does not oblige a company to use FRS 105 — a qualifying company may instead apply FRS 102 or another framework where that is more appropriate for its reporting needs, its lenders or its group. Directors should consider the choice deliberately rather than assuming the simplest option is automatically the right one.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that meets the size conditions can choose to apply FRS 105, but it is equally entitled to prepare its accounts under FRS 102 — including the small entities provisions — or another framework that applies to it. The decision usually comes down to what the accounts need to do: whether they are mainly for Companies House and HMRC, or whether a bank, investor, buyer or parent company expects a fuller level of disclosure. Because the choice affects what the accounts look like, it is best considered before the year-end work begins.

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. These are the applicable size conditions, and how each is measured follows the rules of the regime rather than a simple reading of the year's figures. Meeting 2 of the 3 does not settle the question on its own, because other eligibility rules and exclusions can also apply — certain entity types are outside the regime whatever their size. It is always worth checking the specific 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: it is deliberately pared back, with simplified measurement and a much shorter list of disclosures, and it is only available to companies using the micro-entities regime. FRS 102 is the fuller standard, and it includes small entities provisions that many small companies use; it generally requires more detailed recognition, measurement and disclosure. The practical effect is that FRS 105 accounts tend to be shorter and quicker to assemble, while FRS 102 accounts give readers more information. Which one is right depends on your company, not on which is simpler.

Where a company is required to file annual accounts, the accounts prepared under FRS 105 are its statutory accounts, and they would normally be delivered to Companies House. The micro-entities regime does allow a more abbreviated form of filing in many cases, so what is filed may look shorter than the full set of financial statements prepared for the directors. Filing obligations and deadlines depend on the company's own circumstances, including whether it is trading, dormant or newly incorporated. Filing the accounts is a separate step from dealing with Corporation Tax, and completing one does not automatically complete the other.

Yes, they are two different things. FRS 105 governs how the financial statements are prepared and what they contain. A CT600 is the Corporation Tax Return submitted to HMRC, and it is calculated using tax rules rather than accounting rules. That means figures in the accounts are usually the starting point for a tax computation, but adjustments — such as add-backs for disallowable expenses or claims for capital allowances — can change the taxable profit. The two also have their own submission arrangements and dates, so it helps to plan them together rather than treating one as finished when the other is still outstanding.

It can, if it qualifies for the micro-entities regime and chooses to apply it. Newly incorporated companies are not excluded simply because they are new, and a first set of accounts from a small, straightforward trading company will often fit comfortably within the size conditions. However, first-period accounts can create complications: the period may run for longer than twelve months, and the way the size conditions are assessed in that situation is not always obvious. If your company has just started trading in the Ampthill area, it is worth reviewing the figures and the reporting options before the first accounts are due.