FRS 105 Micro Entity Accounts in Barnstaple

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It sets out how qualifying micro-entities prepare their annual financial statements, using a simplified measurement basis and reduced disclosure requirements compared with the mainstream small company framework, FRS 102. It is the standard that governs the accounts, not the tax return — the accounts are filed with Companies House, while Corporation Tax is handled separately through a CT600 submitted to HMRC.

FRS 105 is intended for companies that qualify for the UK micro-entities regime and then choose to apply it. Qualifying is a two-part test: your company needs to meet the applicable size conditions, and it also needs to fall outside any of the rules and exclusions that would prevent it from using the regime. Meeting the size thresholds on their own is not a guarantee, and some companies that look small on paper are still excluded. Because the detail matters, it is worth checking your specific position rather than assuming either way.

No. The micro-entities regime is an available framework, not an obligation. A company that qualifies as a micro-entity can generally choose whether to apply the micro-entities regime — and therefore FRS 105 — or to prepare its accounts under a fuller framework such as FRS 102. Some directors prefer the extra detail that FRS 102 provides, particularly if a lender, investor or group parent expects it. The right answer depends on your circumstances, and it is a decision you can revisit as your company grows.

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 during the period. These are the size conditions, and they sit alongside other rules and exclusions that can affect eligibility. The conditions are assessed against the relevant period, and thresholds have changed over time, so older guidance should not be relied on.

Both are UK financial reporting standards, but they serve different sizes of company. FRS 105 is the micro-entities standard: it is deliberately short, uses a simpler measurement approach and requires far fewer disclosures. FRS 102 is the framework used by most small and medium-sized companies, and it offers more accounting policy choices and requires more extensive notes. In practice, FRS 105 accounts are quicker and cheaper to prepare and easier to read, while FRS 102 accounts give a fuller picture that some lenders and investors prefer.

Yes — for a company that prepares FRS 105 Micro Entity Accounts, those accounts form part of the annual accounts that are filed at Companies House, subject to the filing requirements and any exemptions that apply to your company. This is a separate exercise from submitting a Corporation Tax Return (CT600) to HMRC, and separate again from filing a Confirmation Statement. Getting the accounts prepared is one step; getting each filing submitted on the right basis is another, and it is worth keeping them clearly distinguished in your records.

A newly incorporated company can use the micro-entities regime from its first accounting period if it meets the applicable conditions and chooses to apply it, although the assessment is based on the relevant period and rules and exclusions still apply. Many new Barnstaple companies with modest turnover and a small number of employees do fall within the regime. Where a company is part of a group, has more complex transactions, or expects to grow quickly, it is worth reviewing the position before committing to a framework.

In broad terms, we need your bookkeeping or accounting records for the period, bank statements, details of sales and purchases, information about any assets bought or sold, and evidence for any balances owed to or by the company. It also helps to know your turnover, balance sheet total and average employee numbers for the period, since these feed into the eligibility assessment. Anything unusual — a loan, a one-off transaction, a change of activity — is worth flagging early so it can be reflected correctly in the financial statements.

Accounting standards, eligibility thresholds and Companies House filing requirements are all subject to change, and they have been updated periodically in recent years. That is one reason it pays to work from current guidance rather than tutorials or templates written several years ago. We keep the preparation of FRS 105 Micro Entity Accounts aligned with the framework as it applies to your accounting period, and we will flag anything in your circumstances that needs a closer look before filing.