FRS 105 Micro Entity Accounts in Castleford

FRS 105 is the UK financial reporting standard that applies to micro-entity accounts. It sets out a simplified basis for preparing financial statements for companies that qualify for the micro-entities regime and have chosen to apply it. In practical terms, it allows a much shorter set of accounts than larger reporting frameworks, usually centred on the balance sheet with a limited number of notes. It sits alongside other UK standards such as FRS 102, which is used by companies that do not fall within the micro-entities regime or that choose not to apply it.

FRS 105 is intended for companies that qualify as micro-entities and choose to apply the micro-entities regime. Qualification depends on meeting the relevant size conditions and not being excluded for any other reason — for example, certain types of company or entity are not eligible regardless of size. Meeting the size tests alone does not guarantee eligibility, so it is sensible to confirm your position before preparing accounts on this basis. If you are unsure whether your Castleford company qualifies, we can review your circumstances with you.

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. These conditions apply subject to the relevant rules and exclusions, and certain companies are unable to use the regime regardless of their size. If your accounting period began before 6 April 2025, different thresholds applied, so it is worth checking which rules are relevant to your period.

No. The micro-entities regime is an available accounting framework, not 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 prepare accounts under a fuller framework such as FRS 102 — for example, because a lender, investor or group structure expects more detailed information. The decision is usually a practical one based on who will rely on the accounts.

FRS 105 is the more streamlined of the two. It is designed for micro-entities and generally requires simpler measurement and far fewer disclosures, with accounts often running to just a balance sheet and a small number of notes. FRS 102 is a broader standard used by small and larger entities and typically involves more detailed accounting treatments and fuller disclosure. Because FRS 105 is simpler, it can be quicker and cheaper to prepare — but it may provide less information to anyone reading the accounts, which is why some companies deliberately choose FRS 102 instead.

Yes. Preparing accounts under FRS 105 does not remove the requirement to file annual accounts with Companies House where that requirement applies to your company. The accounts filed should be prepared in accordance with the chosen reporting framework, and micro-entity accounts are filed in a specific format. Filing accounts with Companies House is a separate exercise from submitting a Corporation Tax Return to HMRC, and each has its own deadlines and requirements.

Yes, they are separate. Your FRS 105 Micro Entity Accounts are the financial statements prepared under the micro-entities regime, while a CT600 is the Corporation Tax Return submitted to HMRC to report your company's taxable profits and calculate the tax due. The two are linked because the tax return is usually built from the same underlying accounting records, but they are different documents with different purposes and different submission routes. Completing one does not automatically complete the other.

We normally need a complete picture of your company's activity for the accounting period. That typically includes bank statements and reconciliations, sales and purchase records, expense invoices and receipts, details of any assets and liabilities, information on directors' loans and any amounts owed to or by the company, and stock or work-in-progress figures where relevant. It also helps to know the period covered, whether the company is dormant or trading, and whether you have already decided to apply the micro-entities regime. The more complete and organised your records, the smoother the preparation process tends to be.

It is possible for a newly incorporated company to fall within the micro-entities regime, but eligibility depends on the size conditions and on whether any exclusions apply. A first set of accounts is often straightforward, particularly for a company that has only recently started trading, but it still needs to be prepared on a proper basis with the correct figures and disclosures. If you are launching a company in Castleford, we can talk you through what your first set of FRS 105 Micro Entity Accounts is likely to involve.