FRS 105 Micro Entity Accounts in Dryslwyn

FRS 105 is the UK financial reporting standard for entities applying the micro-entities regime. It is the framework used to prepare FRS 105 Micro Entity Accounts, and it is intentionally simplified compared with the standards used by larger companies. Rather than a long set of disclosures, it centres on a concise balance sheet and a small number of notes, which keeps the accounts proportionate to a genuinely small business. The underlying figures still have to be accurate and supported by proper records — the simplification is in presentation and disclosure, not in the quality of the numbers.

FRS 105 is for companies that qualify for the UK micro-entities regime and that choose to apply it. Qualification is based on size conditions and is subject to other eligibility rules and exclusions, so meeting a size test alone does not automatically mean the regime is available or appropriate. Some companies are excluded from the regime for other reasons, which is why it is worth checking your specific circumstances rather than assuming. For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of 3 applicable 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.

No. The micro-entities regime is an available accounting regime, not an obligation. A company that falls within it can generally choose whether to apply it or to prepare accounts under a different framework instead. The choice often comes down to what the accounts are used for — for example, whether lenders, investors or other parties need a more detailed set of financial statements. Where the regime is chosen, FRS 105 is the standard that applies to those accounts.

Both are UK accounting frameworks, but they differ in scale and detail. FRS 105 is the micro-entities standard and is the more streamlined of the two, with a balance sheet-focused approach and very limited disclosure. FRS 102 is used more broadly, including by small companies that do not qualify for — or choose not to use — the micro-entities regime, and it generally involves more recognition, measurement and disclosure requirements. In short, FRS 105 suits qualifying micro-entities that want proportionate reporting, while FRS 102 tends to be used where more detail is needed or the micro-entities regime is not applicable.

Filing the accounts with Companies House and preparing them under FRS 105 are two distinct steps. Once the FRS 105 Micro Entity Accounts have been prepared and approved in line with the company's procedures, they are typically filed with Companies House as the company's annual accounts. The content of what is filed should match what has been prepared and approved, and it must respect any filing options the micro-entities regime permits for your company. This filing is separate from your Corporation Tax obligations.

Yes. FRS 105 relates to the accounting and financial reporting framework used to prepare the company's financial statements. A CT600 is a separate Corporation Tax filing submitted to HMRC, and it is driven by the company's tax position rather than by the accounting standard chosen. The two are connected in the sense that both draw on the same underlying financial records, but they are prepared and submitted separately, and each has its own requirements. It is worth planning for both rather than treating one as a substitute for the other.

A newly incorporated company can potentially use FRS 105 Micro Entity Accounts if it qualifies for and chooses the micro-entities regime for the period in question. In practice, many new companies are small enough to fall within the size conditions, but qualification also depends on the applicable rules and exclusions, and on how the company's first accounting period is structured. It is worth reviewing your position early, before the first set of accounts is prepared, so the framework is applied consistently from the start.

Typically you would provide complete financial records for the accounting period — bank statements and reconciliations, sales and purchase information, payroll and employee details, details of any assets bought or sold, stock or work in progress where relevant, and information about loans, credit arrangements and director balances. Company details, the accounting reference date, and any previous accounts are also useful. Having these ready makes it easier to prepare FRS 105 Micro Entity Accounts that properly reflect the company's position and to identify anything that needs clarification before the accounts are finalised.