FRS 105 Micro Entity Accounts in Chessington

FRS 105 is the UK financial reporting standard that applies to companies preparing accounts under the micro-entities regime. It is a simplified framework: it restricts some of the measurement options available under larger standards and requires far fewer disclosures, which keeps the financial statements short and proportionate for very small companies. It governs how the accounts are drawn up — it is not a tax regime and it does not determine how much Corporation Tax a company pays.

No. The micro-entities regime is an available accounting regime rather than a mandatory one. A company that qualifies as a micro-entity can generally choose to apply it and prepare FRS 105 accounts, or it can prepare accounts under another applicable framework such as FRS 102. Many qualifying companies choose FRS 105 because the accounts are simpler and shorter, but the decision should suit your circumstances, particularly if you have transactions that are easier to present under a different framework.

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 tests does not automatically make a company eligible, because other rules and exclusions can apply, and the position can vary where an accounting period is longer or shorter than a year. It is always worth checking the specific rules for your company and period.

Both are UK financial reporting standards, but they are aimed at different sizes of company and offer different levels of complexity. FRS 102 is a fuller framework that permits options such as fair value measurement, revaluation of certain assets and recognition of deferred tax, and it requires more extensive disclosures. FRS 105, used under the micro-entities regime, strips much of that away: fewer measurement choices, simpler presentation and a much lighter set of notes. In practice, FRS 105 accounts are shorter and more straightforward, while FRS 102 accounts give more flexibility where a company's circumstances call for it.

Where a company has an obligation to deliver accounts to Companies House, the accounts — including those prepared under FRS 105 — form part of that delivery. Whether the accounts can be filed as micro-entity accounts depends on the company qualifying for the regime, choosing to apply it and meeting the filing requirements that apply to it. The accounts also serve other purposes, such as being approved by the directors and used as the starting point for the company's tax position, so the fact that accounts are prepared does not mean their only purpose is a Companies House filing.

Yes, they are two different things. FRS 105 accounts are the company's financial statements, prepared under the micro-entities regime and typically delivered to Companies House where a filing obligation applies. A CT600 is a Corporation Tax Return submitted to HMRC, calculating the company's tax position for the period. The figures in your accounts often inform the tax return, and both draw on the same underlying records, but the documents have separate purposes, separate audiences and separate submission routes.

It can, if it qualifies as a micro-entity for the period and chooses to apply the micro-entities regime — FRS 105 is not restricted to long-established companies. Two points are worth watching in the early years: a first accounting period can be longer than twelve months, which affects how the size conditions are considered, and a company that expects to grow quickly may prefer a framework it can continue using without change. It is sensible to review the position for the specific period rather than assume it.

Typically we need your bookkeeping or accounting records for the period, bank and credit card statements, sales and purchase information, details of any assets bought or sold, stock or work-in-progress figures where relevant, loan and finance agreements, payroll information to support the average employee number, and the previous year's accounts if there are any. If the company is new, incorporation details and opening balances are helpful. The more complete the records, the smoother the preparation process tends to be.

Yes. Companies House has been introducing and consulting on reforms, including a move towards filing accounts using commercial software rather than paper or web forms, and the removal of the option for small and micro companies to file abridged or filleted accounts that omit certain information. The changes are being brought in gradually and some timings have been consulted on, so it is worth checking the current position before you file. If you would like us to keep this in mind when preparing your accounts, just ask.