FRS 105 Micro Entity Accounts in East Boldon: Clear Reporting for Qualifying Companies

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It sets out how a qualifying micro-entity prepares its annual financial statements, including the balance sheet and the related notes, using simplified measurement and disclosure rules. It is not a tax regime and it is not a filing deadline — it is the accounting framework that determines how the accounts themselves are put together. If a company qualifies for the micro-entities regime and decides to apply it, FRS 105 is the standard used to produce those FRS 105 Micro Entity Accounts.

FRS 105 is available to companies that qualify for the UK micro-entities regime and choose to apply it. Qualification is based on size, and other rules and exclusions can also affect whether a company is eligible. Because the regime is optional, a qualifying company may instead report under a different framework such as FRS 102. Meeting the size conditions on their own does not automatically mean FRS 105 must be used, and it does not always guarantee eligibility once the wider rules are taken into account. It is worth checking your position with an accountant before deciding.

No. The micro-entities regime is an available accounting regime rather than a mandatory one. A company that qualifies may choose to apply it, in which case FRS 105 applies to its financial statements, or it may choose a different framework. Smaller companies sometimes prefer FRS 102 because it allows certain treatments that FRS 105 does not, so the decision is not purely about simplicity. What matters is that the choice is made deliberately, with a clear understanding of the consequences for the figures and the disclosures in the accounts.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of 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. These are the size conditions only. Other eligibility rules, exclusions and specific circumstances can affect whether the micro-entities regime is actually available to a particular company, so the thresholds should be treated as a starting point rather than a complete answer.

Both are UK financial reporting standards, but they are aimed at different sizes and needs. FRS 105 is the micro-entities standard: it is deliberately simplified, with fewer disclosures and a narrower set of permitted accounting treatments. FRS 102 is the wider standard used by many small and medium-sized companies, and it offers more options — for example around certain asset measurements and fair value — that FRS 105 does not. In practice, the choice can affect how items are valued and how much detail appears in the notes, so it is worth considering which framework suits your business before the year end is prepared.

Yes. A company's annual accounts, including those prepared under FRS 105, are filed with Companies House as part of the company's statutory filing obligations. Micro-entity accounts filed at Companies House are generally presented in a simplified form, typically including the balance sheet and the relevant notes, with the profit and loss account not required to be filed in the same way as for larger companies. Filing the accounts is separate from filing a Confirmation Statement, and both are separate from anything submitted to HMRC.

Yes, they are two different things. FRS 105 Micro Entity Accounts are the company's financial statements, prepared under the micro-entities regime and filed with Companies House. A Corporation Tax Return (CT600) is a tax filing submitted separately to HMRC to report the company's taxable profits and calculate what is due. The accounts usually provide the starting point for the tax return, but the tax computation can include adjustments that do not appear in the accounts at all. Preparing one does not automatically deal with the other.

As a general guide, we would need your bookkeeping or accounting records for the period, including sales and purchase information, business bank statements, details of expenses, any loans or finance agreements, fixed assets and depreciation, stock or work in progress where relevant, and director loan balances. It also helps to have the previous year's accounts or tax return, details of any changes during the year such as new borrowing or asset purchases, and confirmation of your shareholding and company details. Once we have the records, we can confirm what is required to complete the accounts and discuss any outstanding points.