FRS 105 Micro Entity Accounts in East Bergholt: Expert Preparation for Qualifying Micro-Entities

FRS 105 is the UK financial reporting standard that applies to companies preparing accounts under the micro-entities regime. It is a simplified standard, designed for the smallest companies, with a reduced set of disclosure notes and a more straightforward approach to recognising and measuring assets and liabilities. FRS 105 does not apply to every small company – it applies where a company qualifies as a micro-entity and has chosen to use that regime for its financial statements.

FRS 105 is intended for companies that qualify for the UK micro-entities regime and decide to apply it. Qualifying depends on meeting the size criteria – for accounting periods beginning on or after 6 April 2025, generally at least two of the following three: 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. Other rules and exclusions can also affect eligibility, so meeting the size tests alone does not guarantee that a company can use the regime. It is always worth checking your specific position.

No. The micro-entities regime is an available accounting framework rather than a mandatory one. A company that qualifies as a micro-entity can generally choose whether to prepare its accounts under the micro-entities regime or under a fuller standard such as FRS 102 Section 1A. FRS 105 applies when that choice has been made. Some companies prefer the greater level of disclosure and detail that a non-micro-entity framework provides, particularly if lenders, investors or group companies expect it.

Both are UK accounting standards, but they are aimed at different sizes of company. FRS 105 is the micro-entities standard and is deliberately simpler: it restricts certain measurement approaches, avoids fair value accounting and revaluations in most circumstances, and requires far fewer notes to the accounts. FRS 102 is used by larger small companies and by entities outside the micro-entities regime, and it comes with more detailed recognition, measurement and disclosure requirements. Choosing between them is really about which regime your company qualifies for and which basis best suits how you report.

Yes. A company preparing FRS 105 accounts still has to file its annual accounts at Companies House, in line with the filing requirements that apply to it. The micro-entities regime allows for a shorter, simpler set of accounts to be delivered, but that does not remove the filing obligation itself. Filing the accounts at Companies House is separate from your Corporation Tax Return (CT600), which is submitted to HMRC. The two filings may be based on similar figures, but they are distinct documents with different purposes and different submission routes.

Yes, they are separate. FRS 105 Micro Entity Accounts are the financial statements prepared under the micro-entities regime, and they are generally filed at Companies House. A CT600 is a Corporation Tax Return submitted to HMRC to report your company's taxable profits and calculate the tax due. The starting point for a CT600 is usually the profit figure in your accounts, adjusted for tax purposes, but the return itself is a different document with its own deadlines and its own submission process.

A newly incorporated company can use FRS 105 if it qualifies as a micro-entity and chooses to apply the micro-entities regime. Eligibility is assessed for each accounting period, so a company's first set of accounts may well fall within the micro-entity criteria, particularly where trading has just begun. That said, qualifying is not automatic and other rules or exclusions can be relevant, so it is sensible to confirm your position before preparing the first set of financial statements on that basis.

Typically you would provide your bookkeeping records for the period, including sales and purchase information, bank and cash records, details of any assets and liabilities, loan or lease agreements, and a record of amounts owed to and by the company. Prior year accounts, company details and details of any share capital or dividends are also helpful. From there, the figures can be compiled into a balance sheet and the limited disclosures required under FRS 105. The more complete and organised your records, the more straightforward the preparation process tends to be.

Companies House has been introducing reforms to how accounts are filed, including a shift towards software-based filing and a greater emphasis on the information provided for small and micro-entity accounts. The direction of travel is towards digital filing rather than paper or simple web-based submission. Because the details and timings of these changes can be updated, it is worth checking the current Companies House guidance or speaking to us before your next filing so that your FRS 105 Micro Entity Accounts are submitted in an accepted format.