FRS 105 Micro Entity Accounts in Cleveland: Simpler Statutory Accounts for Qualifying Companies

FRS 105 is the UK financial reporting standard for the micro-entities regime — formally, the Financial Reporting Standard applicable to the Micro-entities Regime. It sets out how a qualifying company that chooses that regime prepares its statutory financial statements, with simplified measurement and much reduced disclosure compared with the fuller standards used by larger companies. It is an accounting and reporting framework for the accounts themselves, not a tax return, a filing service or a substitute for any other company obligation.

FRS 105 can be used by companies that qualify as micro-entities and choose to apply the micro-entities regime. In broad terms that means meeting the applicable size conditions and not falling within any of the rules or exclusions that sit around the regime. Because those tests are applied to your company's own circumstances and accounting period, the sensible approach is to check eligibility before deciding on a framework rather than assuming that being a small company is automatically enough.

No. Qualifying for the micro-entities regime does not force you to use it. A company that meets the criteria can choose FRS 105, or it can report under a fuller framework such as FRS 102, including the small entities provisions. Some companies prefer FRS 105 because the accounts are shorter and simpler; others want more disclosure, perhaps because a lender, investor or group parent asks for it. What matters is making the choice deliberately and then applying it consistently.

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. Those are size conditions only. Other eligibility rules and exclusions also apply, and the tests are applied to the company and the period in question, so meeting the thresholds does not by itself guarantee that the regime can be used. Earlier accounting periods were subject to different thresholds, which is why older guidance can be misleading.

FRS 105 is designed specifically for the micro-entities regime, so it is deliberately shorter, with fewer disclosure requirements and simpler measurement rules — for example, certain fair value and revaluation treatments are not available and deferred tax is not recognised. FRS 102 is a broader framework used by small and larger entities, with more detailed recognition, measurement and disclosure requirements. The practical consequence is that the same company can produce noticeably different accounts depending on the framework chosen, which is why the decision is usually worth discussing before the year end rather than afterwards.

Micro-entity accounts prepared under FRS 105 generally form part of the statutory accounts filed with Companies House, typically as a balance sheet together with the required notes. The rules on exactly what must be filed have been changing: requirements taking effect for accounting periods beginning on or after 6 April 2025 mean more of the accounts, including the profit and loss account, generally need to be filed. Because filing requirements can be updated, it is worth confirming the current position for your company's specific period. Filing accounts with Companies House is also entirely separate from anything submitted to HMRC.

Yes, they are two different things with two different purposes. FRS 105 Micro Entity Accounts are the statutory financial statements prepared under the micro-entities regime, and they support the company's accounts filing at Companies House. A Corporation Tax Return (CT600) is a separate submission made to HMRC to report the company's taxable profits and arrive at the tax due, using figures that should be consistent with the accounts. Filing accounts at Companies House does not settle your corporation tax position, and submitting a CT600 does not replace the accounts filing.

The direction of travel is towards more transparent accounts filed digitally. For accounting periods beginning on or after 6 April 2025, the information that must be filed at Companies House has increased, with the profit and loss account generally needing to be filed alongside the balance sheet, and filing is moving towards software-based submission. For a micro-entity, that means the figures behind the accounts need to be robust enough to withstand wider publication, and it makes early preparation considerably more valuable than last-minute assembly. As the rules and their timings can be updated, it is worth checking the current requirements for your particular accounting period.