FRS 105 Micro Entity Accounts in Birkenhead

FRS 105 is the UK financial reporting standard for micro-entities. It sets out the accounting and disclosure rules that apply when a qualifying company chooses to use the micro-entities regime. It is a deliberately simplified framework: it works on a historical cost basis and requires far less disclosure than fuller standards, which keeps the accounts short and straightforward. FRS 105 governs how the accounts are prepared — it is not a tax return, and it does not deal with how much Corporation Tax your company pays.

FRS 105 is available to companies that qualify as micro-entities and then choose to apply the regime. 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 those size conditions is not the whole picture, because other eligibility rules and exclusions can apply — for example, certain types of company cannot use the regime regardless of size. Eligibility needs to be checked against your specific circumstances before accounts are prepared on that basis.

No. The micro-entities regime is an available accounting regime, not an automatic requirement. A company that qualifies may choose to apply it, and FRS 105 applies when that choice is made. Where a qualifying company decides not to use the micro-entities regime, it would typically report under another framework such as FRS 102. The decision often comes down to whether you want the simplest possible set of accounts or need the extra presentation and measurement options a fuller standard allows.

Both are UK financial reporting standards, but they sit at different levels of complexity. FRS 105 is the micro-entities standard: it uses historical cost only, permits a much shorter set of notes, and keeps measurement simple. FRS 102, including the small companies provisions in Section 1A, offers more flexibility — for example, revaluation of certain assets and recognition of deferred tax — in exchange for more disclosure and more detailed accounting work. In practice, choosing between them is about matching the framework to what your company actually needs from its accounts.

Companies with filing obligations generally do need to deliver accounts to Companies House, and where those accounts are prepared under FRS 105 they would be filed as micro-entity accounts. The filing itself sits alongside, and is separate from, your other company obligations. If you are unsure what your company is required to file and when, check the current guidance from Companies House or ask us and we will point you in the right direction.

Yes, they are two different things. FRS 105 Micro Entity Accounts are the financial statements prepared under the micro-entities accounting framework. A CT600 is a Corporation Tax Return submitted separately to HMRC, and it deals with the company's tax position rather than its financial reporting framework. The two need to be consistent with each other in terms of the underlying figures, but preparing accounts does not remove the need to submit a tax return, and vice versa. Your Confirmation Statement is a third, separate filing.

It is possible for a newly incorporated company to prepare its first set of accounts under FRS 105, provided it qualifies for the micro-entities regime and chooses to apply it. Whether it qualifies depends on its size in the relevant period and on whether any of the eligibility rules or exclusions affect it — meeting the size conditions alone does not automatically guarantee eligibility. For a first accounting period, the figures may cover a shorter or longer stretch than a full year, so it is worth having the position reviewed before deciding.

We normally need a clear picture of the company's transactions for the period: bookkeeping or accounting software records, bank and payment provider statements, sales invoices and purchase receipts, payroll information if you employ staff, details of any equipment or other assets bought or sold, loan and director's loan account information, and stock or work-in-progress figures where relevant. If this is not your first set of accounts, your previous accounts and opening balances are useful too. Having these ready makes the preparation smoother and reduces the number of queries that come back to you later.

Companies House has been moving towards accounts being filed in a structured digital format through software, and micro-entity accounts are expected to fall within that change, with more information filed than the current abbreviated presentation. Exact requirements and timings are set out in official guidance, so it is worth confirming the current position before you file. If you would like your accounts prepared and filed under the arrangements that apply to your period, speak to us and we will work with the requirements in force at the time.