FRS 105 Micro Entity Accounts in Burgess Hill

FRS 105 is the UK financial reporting standard for micro-entities. It sets out how a qualifying company that has chosen to apply the micro-entities regime prepares its annual financial statements, including the balance sheet, related notes and, where presented, the profit and loss account. It is a simplified framework intended for very small companies, with fewer disclosure requirements than the fuller standards used by larger businesses. FRS 105 applies when a company both qualifies for the micro-entities regime and decides to use it.

FRS 105 is intended for companies that qualify as micro-entities under the UK rules and that 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 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 conditions does not automatically mean a company qualifies, because other rules and exclusions can apply — for example, certain entities are excluded from the regime regardless of size. Eligibility should always be checked against your company's specific position.

No. The micro-entities regime is an available accounting regime rather than a mandatory one. A company that qualifies can choose to apply it, and FRS 105 applies when that choice is made. Some qualifying companies prefer to use a fuller framework instead, often because they want to present more detail to lenders, investors or group companies. The decision is a reporting choice, and it should be made with a clear understanding of what each option involves.

Both are UK financial reporting standards, but they are aimed at different sizes of company. FRS 105 is the micro-entities standard, offering a streamlined set of financial statements with reduced disclosures and simpler measurement requirements. FRS 102 is the standard used by small and larger entities that do not apply the micro-entities regime, and it generally involves more detailed disclosures and more complex accounting treatments — for example around financial instruments, deferred tax and certain fair value measurements, which FRS 105 does not require in the same way. Choosing between them depends on eligibility and on what you need your accounts to show.

Where a company prepares FRS 105 Micro Entity Accounts for a financial year, those accounts normally form the basis of the annual accounts it files at Companies House, subject to the filing requirements that apply to the company. Filing the accounts is a separate step from preparing them, and it is also separate from your Corporation Tax Return (CT600), which is submitted to HMRC. If you are unsure which filings apply to your company and in what form, it is worth confirming your position rather than relying on a general rule of thumb.

Yes, they are separate. Your FRS 105 Micro Entity Accounts are the financial statements prepared under the micro-entities framework, while a CT600 is the Corporation Tax Return submitted to HMRC to report your company's taxable profits and calculate the tax due. The figures in your accounts often inform the tax return, but the two documents serve different purposes, go to different bodies and follow different rules. Preparing one does not automatically complete the other, so both need to be dealt with.

A newly incorporated company can apply the micro-entities regime for its first accounting period if it qualifies and chooses to do so — but the criteria still have to be met, and a first-year company's size figures may look different from a mature business. Because eligibility depends on your actual turnover, balance sheet total and employee numbers, along with the other rules and exclusions that apply, the position should be reviewed rather than assumed. A short review at the start of your first reporting period is usually the easiest way to get this right.

In practice, we usually need your bookkeeping or accounting records for the period, bank and credit card statements, sales invoices and purchase receipts, details of any fixed assets bought or sold, share capital information, and any director's loan movements. Your previous year's accounts, if you have them, are helpful for consistency, and a note of anything unusual during the year — a new loan, a major purchase, a change in ownership — helps us reflect it properly. The quality of the underlying records largely determines how straightforward the preparation is.

The rules around company accounts and filing have been under review in recent years, and changes have been made and consulted on that affect how accounts are prepared and delivered. Because the detail and effective dates matter, and because they can differ depending on your company's circumstances and accounting period, the most reliable approach is to check the current position for your specific year end rather than rely on older guidance. We can explain how the rules stand for your company when we review your FRS 105 Micro Entity Accounts requirements.