FRS 105 Micro Entity Accounts in Christchurch

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It sets out how the smallest companies prepare their annual financial statements, including the profit and loss account, balance sheet and notes. Compared with standards written for larger entities, FRS 105 is deliberately streamlined: accounts are prepared on a historical cost basis, there is no revaluation or fair value accounting, and the disclosure requirements are kept to a minimum. It applies only when a company qualifies for the micro-entities regime and chooses to use it, which is why eligibility needs to be checked rather than assumed.

FRS 105 is available to companies that qualify as micro-entities under the UK regime and decide to apply it. Qualifying generally depends on the company meeting at least two of three size conditions for the relevant period, and on the company not falling within any of the exclusions that apply to the regime. Some types of business are excluded altogether, and the detailed rules also look at prior periods and at how the conditions are tested. Meeting the size thresholds on their own does not automatically mean the regime is available, so it is worth reviewing your specific circumstances before preparing accounts on this basis.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least two of three 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 during the period. These conditions are subject to the relevant rules and exclusions. Certain companies are excluded from the micro-entities regime regardless of their size, and the way the conditions are assessed can take previous periods into account. Because the detail matters, eligibility is best confirmed against your company's actual figures and structure.

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 prepare FRS 105 accounts, or it can prepare its accounts under another applicable framework, such as FRS 102. The right choice depends on things like who uses the accounts, whether lenders or investors expect particular disclosures, and how the company wants to present its position. Consistency also matters: once a framework is adopted, it should be applied consistently, and any change of framework is subject to the relevant rules.

FRS 105 is the standard for the micro-entities regime, while FRS 102 is the wider UK standard for small and larger entities. In practice, the main differences are the level of detail and the accounting options available. FRS 105 accounts use a historical cost basis with very limited disclosures, producing a short, simple set of financial statements. FRS 102 permits more accounting choices and expects considerably more disclosure. Some companies that do not qualify for the micro-entities regime can still use the small entities section of FRS 102, which is why it is worth confirming which framework genuinely fits your company.

Yes. A company preparing statutory accounts is generally required to file them with Companies House, and micro-entity accounts can be filed in the simplified micro-entity format rather than a fuller set of accounts. Filing is done within the statutory deadline that applies to the company's accounting period. It is worth noting that Companies House filing requirements have been changing, with a shift towards filing through software and structured data, so the practical mechanics of filing small and micro-entity accounts may look different over time. We can help you understand the current position for your company.

Yes, they are separate. FRS 105 accounts are the statutory financial statements prepared under the micro-entities regime and filed with Companies House. A CT600 is the Corporation Tax Return submitted to HMRC, which is based on the company's results but is a different document with its own deadline and requirements. HMRC typically expects accounts and a tax computation alongside the return, and the taxable profit figure can differ from the accounting profit because of adjustments such as disallowable expenses or capital allowances. Preparing the accounts and the tax return together helps keep the figures consistent.

We usually need a complete picture of the company's trading for the period. That means bookkeeping or accounting records, bank statements and reconciliations, sales and purchase records, payroll information and any CIS or subcontractor details, plus a list of fixed assets and any additions or disposals. Details of loans, director's loan account movements, stock or work in progress, and any grants or one-off transactions are also helpful. If the company has filed accounts before, sending the previous set speeds things up, as does letting us know about any changes in the business during the period.