FRS 105 Micro Entity Accounts in Bromley: Simplified Financial Reporting for Qualifying Companies

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It sets out how their annual accounts should be prepared, with simplified measurement rules and much shorter disclosure requirements than the standards used by larger companies. It is not a tax rule and it is not a Companies House form — it is the accounting framework you follow when preparing micro-entity financial statements under that regime.

A UK company can use FRS 105 if it qualifies for the micro-entities regime and chooses to apply it. For accounting periods beginning on or after 6 April 2025, the size conditions are 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, and a company generally needs to meet at least 2 of those 3. Qualifying is not only about size, however: other eligibility rules and exclusions apply, and some entities cannot use the micro-entities regime at all. A newly incorporated company may potentially qualify, but its first period is assessed on its own figures, so it is worth confirming your position rather than assuming it.

No. The micro-entities regime is an option available to qualifying companies rather than an obligation. If your company qualifies, you can choose to prepare micro-entity accounts under FRS 105, or you can prepare accounts under a fuller framework such as FRS 102 Section 1A. Some companies prefer fuller reporting because it gives lenders, banks or investors more information about the business, while others value the simplicity of FRS 105. The decision is usually best made by considering who will read the accounts and what they need from them.

FRS 102 is the general UK financial reporting standard, and Section 1A of it is available to small companies. FRS 105 is a separate and considerably shorter standard for the micro-entities regime. FRS 105 keeps measurement on a historical cost basis, does not permit revaluation of property, plant and equipment, does not recognise deferred tax and requires much more limited disclosure. FRS 102 Section 1A allows more accounting options and asks for more notes to the accounts. In practice, the choice comes down to whether you are eligible for the micro-entities regime and how much information you want the accounts to convey.

Yes, in the usual way. If your company prepares FRS 105 Micro Entity Accounts as its statutory accounts, those accounts normally need to be filed with Companies House for the relevant accounting period. Filing accounts is a company law requirement and is separate from anything submitted to HMRC. For a small or micro-entity company, the accounts filed are typically a balance sheet with limited notes rather than the full profit and loss account, although changes to filing requirements are being phased in, so it is worth checking the current guidance before you file.

Yes, they are two different things. FRS 105 Micro Entity Accounts are the company's statutory financial statements, prepared under the micro-entities regime and generally filed at Companies House. A CT600 is the Corporation Tax Return submitted to HMRC and it follows tax rules rather than accounting ones. The accounts are usually the starting point for the tax computation, but adjustments — for example for disallowable expenses or capital allowances — mean the taxable profit can differ from the accounting profit. Preparing the accounts does not by itself settle the company's Corporation Tax position, and the two are handled under separate processes and deadlines.

We need a clear picture of the company's transactions for the accounting period. In practice that usually means bookkeeping records or a trial balance, bank and credit card statements, sales and purchase records, payroll information, details of assets bought or sold, loan balances and any stock or work in progress at the period end. Director's loan account movements matter too, because they affect the figures and can have tax implications. If your records are incomplete, we can talk through what is needed to get them into a workable state before preparation begins, since the exact list depends on how your business operates.

Companies House has been working on reforms that affect small and micro-entity accounts, including a move towards filing accounts digitally in a structured format and plans to require more detail — such as the profit and loss account — rather than the balance sheet and notes alone. These changes form part of a wider company law reform programme and are being introduced in phases. Timings and exact requirements are set out by Companies House and can be updated, so it is sensible to check the latest guidance or ask us what applies to your accounting period.