FRS 105 Micro Entity Accounts in Bradford On Avon

FRS 105 is the UK financial reporting standard that applies to micro-entities. It is designed to simplify statutory accounts, with a shorter balance sheet, fewer notes and a simpler measurement basis than standards aimed at larger companies. FRS 105 goes hand in hand with the micro-entities regime in company law: a company that qualifies for that regime can choose to apply it, and FRS 105 is the standard used to prepare the accounts when that choice is made. It is not a tax return and it does not determine how much Corporation Tax a company pays.

FRS 105 is intended for companies that qualify for the micro-entities regime and decide to apply it. It is not open to every small company, and it is not automatic. Certain types of entity and certain activities are excluded from the regime, and the size conditions must also be met. In practice, a company needs to look at its size in the relevant period, its legal form and what it does before concluding that FRS 105 is available. If your company does not qualify, or you would prefer a framework that offers more flexibility, accounts would be prepared under a different standard instead.

No. Qualifying for the micro-entities regime does not force a company to use it. The regime is an available accounting framework, and FRS 105 applies when a company chooses to adopt it. Some directors prefer to report under a standard that gives more room on measurement and disclosure, particularly where there are more complex transactions, group relationships or valuations to consider. The important point is that the decision should be made deliberately and applied consistently, rather than drifting between frameworks from one year to the next.

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 tests is only part of the picture, because separate eligibility rules and exclusions also apply and can rule a company out. Earlier periods are assessed against the thresholds in force at the time, which is why it is worth checking the position for your specific accounting period rather than assuming.

Both are UK financial reporting standards, but they are aimed at different sizes of company. FRS 105 is the micro-entities standard and is deliberately minimal, with a simpler balance sheet format, very limited disclosures and a measurement basis that does not allow some of the fair value and revaluation options found elsewhere. FRS 102 is the standard for larger entities and the small companies regime, and it offers considerably more detail, more disclosure and more accounting choices. A company that does not qualify for, or chooses not to apply, the micro-entities regime would typically report under FRS 102 rather than FRS 105.

Yes. For a company that is required to file annual accounts, the financial statements, including those prepared under FRS 105, form part of that Companies House filing obligation. Filing the accounts is a company law requirement and it is separate from anything sent to HMRC. The accounts filed must be prepared from the company's records and approved by the directors before submission. Keeping the accounts preparation and the filing step properly organised helps avoid the last-minute scramble that often comes with a deadline.

Yes, they are two different things. FRS 105 Micro Entity Accounts are the statutory financial statements, prepared under the micro-entities regime and filed with Companies House. A CT600 is the Corporation Tax Return submitted to HMRC, which deals with the company's tax position and is filed separately, with its own deadline and its own computations. The two are closely connected because the tax return usually starts from the figures in the accounts, but preparing the accounts does not by itself satisfy the Corporation Tax filing requirement, and vice versa.

Companies House has been phasing in reforms under the Economic Crime and Corporate Transparency Act, including a move towards filing accounts through commercial software rather than a web form or paper, and a requirement for small and micro-entity accounts to include more information than at present, such as profit and loss detail. These changes affect how accounts are submitted and what is visible on the public register, so they are worth planning for rather than reacting to at the last minute. The exact requirements and dates are set by Companies House, so it is sensible to check current guidance when your filing window approaches.