FRS 105 Micro Entity Accounts in Chilworth — Professionally Prepared Financial Statements

FRS 105 is the UK financial reporting standard for micro-entities. It sets out how a qualifying company prepares its annual financial statements when it chooses to apply the micro-entities regime — what the statements contain, how amounts are measured, and which notes are required. It is deliberately lean: micro-entity accounts are typically built around a balance sheet supported by a limited number of notes, rather than the fuller disclosure seen under other UK standards. FRS 105 sits alongside standards such as FRS 102, but is designed for the smallest companies that meet the micro-entity conditions and decide to use that regime.

FRS 105 is intended for companies that qualify for the micro-entities regime and then choose to apply it. Qualifying depends on size — generally meeting at least 2 of the 3 applicable conditions — but also on other eligibility rules and exclusions, so meeting a size threshold on its own is not the whole picture. Some companies are excluded from the regime, for example certain companies that form part of a group or whose securities are admitted to trading on a regulated market. Because the rules can be nuanced, it is sensible to check your position before assuming the micro-entities regime is available to you.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that qualifies may choose to apply it, in which case FRS 105 applies, or it may prepare its accounts under a different framework such as FRS 102 (including the small entities provisions). The right choice depends on your circumstances — for example, whether you need fuller disclosures, whether your transactions sit comfortably within the micro-entity framework, and what the readers of your accounts need to see. It is a decision worth taking deliberately rather than by default.

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 sit alongside other rules and exclusions, so satisfying the size tests does not automatically mean a company qualifies for the micro-entities regime. Earlier accounting periods are subject to the thresholds that applied at the time, and the position can be affected by group structures and other factors.

Both are UK accounting standards, but they are aimed at different sizes of company and offer different levels of flexibility. FRS 105 is the micro-entities standard: it is highly streamlined, typically produces a short balance sheet with limited notes, and restricts certain accounting treatments and options. FRS 102, including its small entities provisions, permits more accounting choices and requires fuller disclosures. In practice, FRS 105 accounts are usually shorter and simpler to read, but they give you less room to present additional information, so the framework you choose should reflect the needs of your business and the people who rely on your accounts.

Yes — a limited company must file statutory accounts at Companies House, and where FRS 105 applies, those accounts are prepared under that framework. Filing the accounts is a separate step from preparing them, and it is also separate from your tax filings. The accounts you file become part of the public record, so it is worth making sure the figures and the presentation are right before submission. We can prepare the accounts and help you understand what needs to be filed and when, based on your company's own reporting dates.

Yes, they are two distinct things. FRS 105 Micro Entity Accounts are the statutory financial statements prepared under the micro-entities regime and filed at Companies House. A Corporation Tax Return (CT600) is a separate filing submitted to HMRC to report the company's taxable profits and calculate the Corporation Tax due. The two usually start from the same underlying records, and the accounts figures often inform the tax return, but they serve different purposes, go to different authorities, and follow different rules. Preparing one does not automatically complete the other.

Companies House filing requirements for small and micro-entity companies are being updated through the wider company law reform programme. The direction of travel is towards more detailed accounts being filed — including profit and loss information — rather than the current position where many micro-entity accounts filed at Companies House are relatively limited. The precise scope and timing depend on legislation and implementation, so the practical effect on your company will depend on your accounting period and circumstances. It is worth reviewing your reporting approach with that in mind rather than assuming current filing habits will continue unchanged.