FRS 105 Micro Entity Accounts in Bordon

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It sets out how a qualifying micro-entity recognises, measures and presents the items in its financial statements, with reduced disclosure requirements compared with fuller standards. In practice, a set of FRS 105 accounts will typically include a balance sheet, notes and the statements required by company law, presented in a simplified form. It is an accounting and reporting framework — it is not a tax return, and it does not replace any of the other filings a company has to make.

FRS 105 can be used by a company that qualifies as a micro-entity under the UK micro-entities regime and chooses to apply that regime. Qualifying is not simply a matter of being small: the company must meet the applicable size conditions and must not fall within any of the rules or exclusions that prevent a company from using the regime. Because the tests look at the company's figures and circumstances, the position can change from year to year, and a company that used FRS 105 previously is not automatically entitled to use it again. It is sensible to check eligibility each time accounts are prepared.

No. Applying the micro-entities regime is a choice available to qualifying companies rather than a requirement. A company that meets the size conditions may instead prepare its accounts under a fuller framework, such as FRS 102 Section 1A, if that better suits its circumstances — for example where it needs to provide more detailed information to lenders, investors or a parent company. FRS 105 applies when the micro-entities regime is chosen. The decision is worth making deliberately, because it affects how the accounts look and what they disclose.

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. Meeting the size conditions is not the whole story, because other eligibility rules and exclusions can apply, and some companies are prevented from using the regime regardless of their size. This is why eligibility should be assessed on the facts of the individual company rather than assumed from the headline figures.

Both are UK financial reporting standards, but they are aimed at different sizes of company. FRS 105 is the lighter regime for qualifying micro-entities, with simpler measurement requirements and fewer disclosures. FRS 102 is the fuller standard, and its Section 1A provides a reduced-disclosure option for small companies that do not qualify for, or do not wish to use, the micro-entities regime. The practical differences tend to show up in areas such as how items are measured, what is included in the notes, and how much detail appears on the face of the accounts. The right choice depends on eligibility and on what the company needs from its financial statements.

Where a company prepares accounts for its members, those accounts normally need to be filed with Companies House in accordance with the filing requirements that apply to it. The fact that accounts are prepared under FRS 105 does not remove that obligation, and it does not mean the accounts are checked or approved by Companies House — filing is simply the delivery of the accounts. Micro-entity accounts filed at Companies House are also made available on the public register, which is worth bearing in mind. We can help you understand what needs to be filed and when, based on your company's own filing requirements.

Yes, they are separate things. FRS 105 accounts are the company's financial statements, prepared under the UK accounting framework for qualifying micro-entities and generally filed with Companies House. A Corporation Tax Return, usually submitted as a CT600, is a tax filing made to HMRC that reports the company's taxable profits and the tax due. The figures in the accounts are normally the starting point for the tax return, but adjustments may be needed, and the two documents serve different purposes and go to different bodies. Preparing your FRS 105 accounts is therefore not the same as dealing with your Corporation Tax obligations.

We generally need a complete picture of the company's transactions and position for the accounting period. That usually means up-to-date bookkeeping or a summary of income and expenses, bank and credit card statements, sales and purchase records, payroll or employee information, and details of assets, stock, borrowings and any amounts owed to or by the company. Details of the company's share capital, any dividends paid and the prior year's accounts are also helpful. If your records are incomplete, tell us — part of the process is working out what is missing and how to deal with it sensibly before the accounts are prepared.