FRS 105 Micro Entity Accounts for Companies in Blackrod Bolton

FRS 105 is the UK financial reporting standard that applies when a company qualifies for the micro-entities regime and chooses to use it. It is the most streamlined of the UK accounting frameworks: it sets out simplified measurement rules, a small number of permitted formats for the balance sheet and profit and loss account, and a limited set of disclosures. In practice, FRS 105 Micro Entity Accounts concentrate on the essentials — what the company owns, what it owes, and what it has earned and spent — rather than the fair value, revaluation and extensive note disclosures found in larger frameworks. It is an accounting standard, not a tax return.

FRS 105 is intended for companies that qualify as micro-entities and that choose to apply the micro-entities regime. For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of the 3 applicable 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 story, because other eligibility rules and exclusions can apply — for example, certain types of entity are not eligible for the regime at all. Eligibility should always be checked against your company's specific circumstances before the framework is used.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that qualifies as a micro-entity can generally choose between preparing micro-entity accounts under FRS 105 and preparing small company accounts under FRS 102 Section 1A. FRS 105 is usually chosen for its simplicity, but there are situations where the wider framework is more suitable — for instance where a company wants to present certain items differently, or where a lender, investor or group structure requires more detail. The choice is usually worth discussing before the accounts are prepared.

Both are UK accounting frameworks, but they are aimed at different sizes of company. FRS 105 is designed for companies using the micro-entities regime and is deliberately minimal: it uses simplified measurement rules, does not permit revaluation or fair value accounting, and requires far fewer disclosures. FRS 102 is a broader framework, and its Section 1A variant is used by many small companies. FRS 102 Section 1A allows more accounting policy choices and requires more notes to the accounts, which can produce a more detailed set of financial statements. The right choice depends on eligibility, on what the company needs from its accounts, and on who will be reading them.

Yes, where the company is subject to accounts filing obligations. Preparing FRS 105 Micro Entity Accounts and filing them are two stages of the same process, and the accounts are filed at Companies House in the micro-entity format. The version filed typically consists of the balance sheet and the required notes, and the profit and loss account is generally not filed — although it still needs to be prepared for the company's own records and for tax purposes. Filing accounts at Companies House is entirely separate from submitting a Corporation Tax Return to HMRC, and both obligations can apply in the same period.

Yes, they are two distinct things. FRS 105 Micro Entity Accounts are the company's financial statements, prepared under the micro-entities regime and filed at Companies House where required. A CT600 is a Corporation Tax Return submitted to HMRC, which reports the company's taxable profits and calculates the tax due. The two are connected — the accounts are usually the starting point for working out taxable profit — but the figures are not identical, because tax rules adjust profits for items that are treated differently for tax than for accounting. Filing one does not discharge the obligation to deal with the other.

A newly incorporated company can potentially use FRS 105 if it qualifies for the micro-entities regime and chooses to apply it, but a new company still has to meet the eligibility conditions. One point that catches people out is that a first accounting period often covers more than twelve months, which affects how turnover is assessed against the size thresholds. Because of that, and because the rules and exclusions need to be applied properly, it is sensible to have the position reviewed before the first set of accounts is prepared rather than assuming the regime applies.

Company filing requirements have been under reform, and Companies House has been moving towards software-based filing for small and micro-entity accounts rather than accepting accounts submitted as free-form documents. Micro-entity accounts are already required to follow prescribed formats, so filing them through recognised software is a natural next step. Because the detail and timing of these changes can shift, it is worth checking the current position each year before your accounts are finalised. We keep the filing route under review so that your FRS 105 Micro Entity Accounts are submitted in an accepted format.

At a minimum, we need a complete record of the company's transactions for the period, together with the documents that support them. In practice that usually means bookkeeping or accounting software reports, bank and credit card statements, sales invoices and purchase invoices or receipts, payroll information, details of any loans or hire purchase agreements, a list of assets owned with purchase dates and costs, stock or work-in-progress figures where relevant, and the previous year's accounts for comparison. It also helps to know whether anything unusual happened during the period — a large one-off purchase, a new loan, or a change in how the business operates. The better the records, the smoother the preparation of your FRS 105 Micro Entity Accounts.