FRS 105 Micro Entity Accounts in Annfield Plain

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It sets out how the financial statements of a qualifying micro-entity are prepared, including what is recognised, how amounts are measured and which disclosures are needed. It is a standalone standard, not merely an abbreviated version of the accounts a larger company would produce, and it applies only when a company has chosen to use the micro-entities regime.

FRS 105 is intended for companies that qualify for the UK micro-entities regime and then choose 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 the size conditions is not automatically enough — other eligibility rules and exclusions can apply, and some companies are not permitted to use the regime at all. It is worth checking your position before assuming you qualify.

No. The micro-entities regime is an available accounting regime rather than a mandatory one. A company that qualifies can choose to use it, and FRS 105 applies when that choice is made. Some qualifying companies prefer to prepare accounts under a fuller framework, for example because a lender, investor or group company wants more detail, or because they expect to grow beyond the size conditions. The decision is one to make deliberately, with the company's circumstances in mind.

Both are UK financial reporting standards, but they are aimed at different sizes of company. FRS 105 is the micro-entities standard and is built around a simpler set of requirements and disclosures. FRS 102 is the wider standard used by many small and medium-sized companies and contains considerably more detail, including areas such as fair value accounting and more extensive note disclosures. Choosing between them is largely a question of which regime a company qualifies for and which framework best suits how it reports.

The financial statements are prepared for the company, and where the company is required to file annual accounts, they form the basis of that submission to Companies House. The exact filing position depends on the company's own circumstances, so it is worth confirming what applies to you. Filing accounts is a separate obligation from filing a Corporation Tax Return, and from filing a Confirmation Statement — each has its own purpose and destination.

Yes, they are two different things. FRS 105 Micro Entity Accounts are the company's financial statements, prepared under the micro-entities reporting framework. A CT600 is the Corporation Tax Return submitted to HMRC, which deals with the company's taxable profits and tax position. The accounts often provide the starting point for the tax return, but the two documents serve different purposes, go to different places, and are governed by different rules. Preparing one does not automatically complete the other.

A newly incorporated company can potentially use FRS 105 if it qualifies for the micro-entities regime and chooses to apply it. In the first period, there may be no prior accounting period to compare against, so eligibility is normally considered on the basis of the company's position in that period and the applicable rules. It is also worth noting that a first set of accounts can raise questions about the period covered and the comparatives shown. Getting advice early can help you set your records up in a way that makes preparation smooth.

Typically you would provide bank statements and reconciliations for the period, details of sales and purchases or access to your bookkeeping records, payroll information if the company employs staff, records of any assets bought or sold, and details of loans, director's loans and amounts owed to or by the company. It also helps to have your previous year's accounts, your company registration details and any relevant correspondence. If your records are incomplete, that is not necessarily a barrier — it just means part of the work involves tidying the figures up first.

Company filing requirements in the UK have been under review, and further changes are expected over time, including how accounts are submitted and what software is used. Because the detail and timing of these changes matter, and because they can affect how a company prepares and files, it is sensible to check the current position rather than rely on older guidance. If you would like help understanding how any change affects your FRS 105 Micro Entity Accounts, that is something we can look at as part of your preparation.