FRS 105 Micro Entity Accounts in Bootle

FRS 105 is the UK financial reporting standard for qualifying micro-entities. It sets out how a company that uses the micro-entities regime prepares its financial statements, and it is deliberately simpler than the standards used by larger companies. It generally works on a historical cost basis, so there is little or no revaluation or fair value work, and it requires far fewer notes to the accounts. The aim is a clear, concise set of financial statements that still gives a fair picture of the company's position and performance for the period.

FRS 105 is for companies that qualify for the UK micro-entities regime and decide to apply it. Eligibility is set by size conditions, and a company generally needs to meet at least 2 of the 3 applicable 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. These figures apply for accounting periods beginning on or after 6 April 2025. Other rules and exclusions can also affect whether a company qualifies, and in some cases the limits are reduced or applied differently. Meeting the size thresholds does not automatically make a company eligible, and eligibility should be checked against the specific rules that apply to your company.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that qualifies can choose to apply it and prepare FRS 105 accounts, but it is also open to a qualifying company to prepare its accounts under a different framework, such as FRS 102. The right answer depends on the company's circumstances — for example, whether the directors want certain items recognised or disclosed in a particular way, or whether the business has arrangements that sit more comfortably under a fuller standard. It is worth reviewing the choice rather than assuming one route is always correct.

The main difference is the level of detail and the measurement rules. FRS 105 is built for micro-entities and generally keeps to a historical cost approach, with much lighter disclosure requirements and a simpler presentation of the financial statements. FRS 102 applies a broader set of recognition and measurement rules, including options such as revaluation of certain assets, and it expects a fuller set of notes. Practically speaking, FRS 102 gives you more tools and more disclosure obligations; FRS 105 gives you a leaner set of accounts. Neither is inherently better — the question is which framework fits your company and the users of its accounts.

For a limited company, the accounts prepared for the year form part of the statutory accounts that must be delivered to Companies House, and a company using the micro-entities regime files micro-entity accounts. This is a separate exercise from preparing the figures internally: the accounts have to be put into the correct statutory format and delivered through the correct channel. It is also separate from your Corporation Tax obligations, which are handled with HMRC rather than Companies House. We can prepare the FRS 105 financial statements and help you understand how the Companies House filing element fits alongside your other deadlines.

Yes, they are two different things. FRS 105 Micro Entity Accounts are the financial statements prepared under the micro-entities regime and delivered to Companies House. A CT600 is the Corporation Tax return submitted to HMRC, which reports the company's taxable profits and is calculated using tax rules rather than the accounting framework alone. This is why profits shown in the accounts and profits shown on the tax return can differ — for instance where capital allowances or disallowable expenses are involved. Keeping the two processes clearly separated helps avoid confusion about what has been filed, and with whom.

In most cases we need your accounting records for the period — bookkeeping or a trial balance, bank statements and reconciliations, sales and purchase records, payroll information, details of any loans or finance agreements, and supporting documents for significant transactions. Information about fixed assets and any depreciation treatment is also useful, along with details of share capital, director's loans and any amounts owed to or by the company at the period end. If your records are incomplete, that is not necessarily a barrier; it just means part of the work involves pulling the figures together before the accounts can be finalised.

Company law and Companies House filing arrangements are being reformed, with a general direction of travel towards accounts being delivered using software and a move away from the practice of filing shortened versions of accounts that do not include the full statutory information. As these changes take effect, micro-entity companies may find that the way their accounts are submitted looks different from what they have done before. The detail matters and it is worth checking the position for your own accounting period rather than relying on older assumptions, so we will talk you through what it means for your filing when the time comes.