FRS 105 Micro Entity Accounts in Chipping Sodbury

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It is issued by the Financial Reporting Council and is deliberately streamlined: it sets out a simple historical cost basis for preparing financial statements, allows a short balance sheet with limited notes, and does not permit fair value accounting, asset revaluation or recognition of deferred tax. In practice, FRS 105 Micro Entity Accounts give a clear, condensed picture of a small company's assets, liabilities and equity without the volume of disclosure found in standards used by larger entities.

FRS 105 is available to companies that qualify for the UK micro-entities regime and then choose to apply it. Qualifying is not the same as being required to use it — a qualifying company may instead prepare accounts under a different standard, such as FRS 102. Qualification is assessed against size criteria plus a range of other rules and exclusions, so two companies with similar turnover can end up in different positions. That is why we look at each company's specific circumstances rather than assuming the regime applies.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that meets the criteria may choose to apply it and prepare FRS 105 Micro Entity Accounts, or it may decide to use a fuller framework instead. Some companies prefer the greater level of detail in FRS 102, particularly where lenders, investors or group arrangements expect more information. The decision is worth taking deliberately, because switching framework later can affect comparability between years.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of the following 3 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 two of the three is the starting point rather than the whole test — other eligibility rules and exclusions apply, including restrictions relating to certain types of company and activity. We check the position against your actual figures before recommending FRS 105 Micro Entity Accounts.

Both are UK financial reporting standards, but they sit at different levels of complexity. FRS 105 is the micro-entities standard: short financial statements, a small number of notes, historical cost only, no revaluations and no deferred tax. FRS 102, including the small companies provisions in Section 1A, offers a fuller framework with more disclosure requirements and more accounting options, such as certain fair value measurements. FRS 102 gives readers more information; FRS 105 gives a simpler, more condensed set of accounts. Which one is right depends on your company's size, ownership and who needs to see the figures.

A company that prepares accounts under the micro-entities regime still has annual accounts filing obligations, and micro-entity accounts can be filed with reduced disclosure. The accounts are prepared first and then submitted as part of the company's filing obligations. It is worth keeping in mind that Companies House filing is only one of several company requirements — a Confirmation Statement is a separate filing, and neither of those is the same as dealing with Corporation Tax.

Yes, they are distinct. FRS 105 Micro Entity Accounts are prepared under the accounting framework and deal with the company's financial reporting, while the CT600 is a Corporation Tax Return submitted to HMRC and deals with the company's tax position. The two are related — the accounts figures normally feed into the tax computation — but they are separate documents with separate purposes, and preparing one does not automatically complete the other. We can help you see how the figures in your accounts flow through to the tax return.

As a starting point, we would normally ask for your company's accounting records for the period, bank statements and reconciliations, sales and purchase information, details of fixed assets and any depreciation, stock or work in progress figures, amounts owed to and by the company, director's loan movements, and details of any share capital. If the company has traded for a few years, the previous year's accounts help ensure consistency. The cleaner and more complete the records, the more efficiently the accounts can be prepared — but if things are untidy, that is a common situation and we can talk through what needs tidying first.