FRS 105 Micro Entity Accounts in Banstead: Straightforward Reporting for Qualifying Micro-Entities

FRS 105 is the financial reporting standard that applies to companies using the UK micro-entities regime. It is a simplified framework: it sets out the recognition and measurement rules and the limited disclosures that a qualifying micro-entity follows when preparing its annual accounts. In practice, FRS 105 Micro Entity Accounts usually consist of a balance sheet, a profit and loss account and a small number of notes, with far less detail than accounts prepared under a larger framework such as FRS 102. It is an accounting and reporting framework — it does not by itself determine how much Corporation Tax a company pays.

FRS 105 is intended for companies that both qualify for the micro-entities regime and choose to apply it. Qualifying depends on the size conditions in company law, together with other eligibility rules and exclusions — some companies are not eligible for the regime regardless of their size. Meeting the size tests does not by itself guarantee eligibility, and eligibility does not force a company to use the regime; it opens up the option. If your company is in Banstead and you are unsure where you stand, it is worth having your position reviewed against the current rules before deciding.

No. A qualifying company can choose to apply the micro-entities regime and prepare FRS 105 Micro Entity Accounts, or it can prepare its accounts under a different framework, such as FRS 102. The regime is an available option rather than an obligation. Which route makes sense can depend on the company's circumstances — for example, whether lenders, investors or other stakeholders expect a particular level of detail, or whether the directors would prefer a fuller set of financial statements. The choice should be made with the current rules and reporting requirements in mind.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of these 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 during the period. These are size conditions, not the whole test. The legislation also sets out other eligibility rules and exclusions that can prevent a company from using the regime even where it meets the size thresholds, so the criteria should be applied carefully to your company's specific period.

Both are UK financial reporting standards, but they operate at different levels of complexity. FRS 105 is designed specifically for the micro-entities regime, with simplified measurement rules and a much smaller disclosure requirement, which is why FRS 105 Micro Entity Accounts tend to be brief. FRS 102 is the wider standard used by many small and medium-sized companies and offers more accounting policy choices and requires more extensive notes. The same company could produce noticeably different accounts depending on which framework is applied, so eligibility and the framework choice go hand in hand.

Where a company uses the micro-entities regime, its FRS 105 accounts are its statutory annual accounts, and they are normally filed with Companies House for the accounting period. The accounts must be approved by the directors and presented in the prescribed format, with the balance sheet including the required statements. The filing deadline that applies depends on the company's accounting reference date and is set out in Companies House guidance, so it is worth checking the position for your own period rather than relying on a general assumption. Filing the accounts with Companies House is separate from anything submitted to HMRC.

Yes — they are two distinct filings. FRS 105 Micro Entity Accounts are the company's statutory financial statements, prepared under the micro-entities regime and filed with Companies House. A CT600 is a Corporation Tax Return, submitted to HMRC to report the company's taxable profits and work out the tax due. The accounts are prepared under accounting rules while the tax return follows tax legislation, so the figures are not always identical. Both are usually built from the same underlying records, and it helps to deal with them together so that adjustments between accounting profit and taxable profit are properly accounted for.

Typically we need your company details and accounting period, a complete record of income and expenses for the period, bank and credit card statements, sales and purchase invoices or receipts, payroll information, details of any loans or director's loans, and records of assets purchased or sold. Details of share capital, dividends paid and any stock or work in progress are also useful. Prior-year accounts help ensure consistency, and if your records are incomplete we can talk through what is needed to fill the gaps. The better the information, the more straightforward the preparation of your FRS 105 Micro Entity Accounts tends to be.