FRS 105 Micro Entity Accounts in Buntingford: Straightforward Accounts for Qualifying Micro-Entities

FRS 105 is the UK financial reporting standard for companies that qualify for, and choose to apply, the micro-entities regime. It is a deliberately simplified framework: it sets out how the balance sheet, profit and loss account and a limited set of notes should be prepared for a micro-entity. Because it removes much of the measurement choice and disclosure detail found in larger frameworks, FRS 105 accounts tend to be shorter and more straightforward than accounts prepared under small-company rules. It governs the statutory accounts, not your tax return.

It is intended for UK companies that meet the micro-entity size conditions and 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 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. Other rules and exclusions can also apply — for example, certain company types and circumstances are not eligible — so meeting the size conditions on their own does not automatically mean a company can, or should, use FRS 105.

No. Qualifying for the micro-entities regime does not force a company to use FRS 105. A qualifying company can choose to apply the micro-entities regime and prepare FRS 105 accounts, or it can use a different framework such as FRS 102. The decision rests with the directors, and it is worth thinking about who relies on the accounts — lenders, investors or group companies may prefer more detail than FRS 105 provides. Consistency matters too, as a change of framework is not something you would typically switch back and forth on.

Both are UK accounting standards, but they suit different companies. FRS 105 is the micro-entities framework: it allows a very stripped-back set of financial statements, with simpler measurement and far fewer disclosures. FRS 102 is the standard used by most other companies, including small companies that apply the small-entities provisions. In practice, FRS 102 accounts give a more detailed picture and are often expected by lenders or investors, while FRS 105 accounts keep preparation lean. The choice is a question of eligibility and of what best suits how the company is used.

Yes. Preparing accounts under FRS 105 does not remove the requirement to file annual accounts for the company. The benefit of the micro-entities regime is that the accounts themselves are simpler, and micro-entity accounts can be filed in a simplified form rather than the fuller format used by larger companies. Filing the accounts at Companies House is separate from paying Corporation Tax or submitting a Corporation Tax Return to HMRC, and the deadlines for each obligation are set independently. It is worth confirming the current filing requirements and dates that apply to your company.

Yes, they are two different things serving two different purposes. FRS 105 accounts are the company's financial statements, prepared under the accounting framework the directors have chosen and generally filed at Companies House. The CT600 is the Corporation Tax Return submitted to HMRC, which calculates the tax due based on the company's taxable profits after tax adjustments. The accounts usually provide the starting point for the tax computation, but the return involves additional figures, reliefs and disclosures of its own. Preparing the accounts does not by itself fulfil your Corporation Tax filing obligation.

In most cases you will need a complete record of the period's income and costs, bank and credit card statements, sales and purchase invoices or a bookkeeping export, payroll and pension information, details of any assets bought or sold, loan and director's loan account movements, stock or work-in-progress figures where relevant, and the previous year's accounts if there are comparatives to carry forward. It also helps to confirm the company's structure, share capital, registered details and any significant one-off events during the year. The more complete and organised the records, the smoother the preparation of FRS 105 Micro Entity Accounts tends to be.

Filing requirements for small and micro-entity accounts have been under review, with Companies House moving towards greater use of digital filing and tighter requirements around the information submitted with accounts. Because these changes are being introduced through legislation and Companies House guidance, the exact rules and dates depend on the current position. Rather than relying on what you have read elsewhere, it is sensible to check the latest guidance or speak to an accountant when your accounts are due, so your filing meets whatever requirements apply at that time.