FRS 105 Micro Entity Accounts in Framlingham

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It sets out how micro-entity accounts should be prepared, including which items are recognised, how they are measured and what has to be disclosed. It is a simplified framework built for straightforward companies, generally based on historical cost, with no revaluation or fair value accounting and a reduced set of disclosure notes compared with frameworks used by larger businesses. FRS 105 applies when a qualifying company chooses to adopt the micro-entities regime for its accounts.

FRS 105 is intended for companies that qualify for the UK micro-entities regime and then choose to apply it. 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. Meeting those size conditions is not on its own a guarantee of eligibility, because other rules and exclusions can apply depending on the type of company and what it does. We look at your specific circumstances rather than assuming a company qualifies simply because it looks small.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that qualifies can generally choose whether to use FRS 105 or to apply a different framework, and that choice may depend on how the business is structured, whether there are group relationships, what kind of finance it has, and what the directors want the accounts to show. Because the regimes differ in both measurement and disclosure, it is worth deciding deliberately at the start of an accounting period rather than leaving it until filing time. We are happy to compare the practical differences so you can make an informed choice.

FRS 102 is the broader UK and Republic of Ireland financial reporting standard, and it is used by far more companies than FRS 105. FRS 102 allows a wider range of accounting treatments, including fair value accounting and revaluations in certain circumstances, and requires more extensive disclosures. FRS 105, by contrast, is a simpler framework available to qualifying micro-entities, generally using historical cost and far shorter notes. The practical result is that FRS 105 accounts tend to be quicker and less costly to prepare and easier to read, while FRS 102 can be more appropriate where the business has more complex transactions, group involvement or particular arrangements with lenders or investors.

A company preparing accounts under FRS 105 still has to file annual accounts with Companies House within the applicable filing period, in the same way as any other company — the framework chosen affects how the accounts are prepared and what they contain, not whether they need to be filed. Micro-entity accounts can be filed in a simplified form, and it is important to understand what that means for the information that ends up on the public register. We can prepare the financial statements and, if you would like us to, handle the Companies House submission as a separate service from your Corporation Tax work.

Yes. FRS 105 accounts are financial statements prepared under the micro-entities reporting framework, while a Corporation Tax Return (CT600) is a separate filing submitted to HMRC that calculates the company's corporation tax position. A Confirmation Statement is separate again, and is a Companies House requirement rather than a tax filing. The accounts and the CT600 are connected in the sense that both draw on the same underlying records, and tax adjustments often start from the profit figure in the accounts, but they are different documents with different purposes, different deadlines and different submission routes. We treat them as distinct pieces of work so nothing is overlooked.

A newly incorporated company can potentially use FRS 105 for its first set of accounts if it qualifies for the micro-entities regime and chooses to apply it, but the first period can involve extra considerations — for example whether the accounting period is longer than twelve months and how that affects the size assessment. New companies also need to think about the practical side of getting records in order from day one, since the accounts can only be as good as the information behind them. We can review your position in the first year and confirm which framework fits before anything is prepared.

As a starting point we need your bookkeeping records for the accounting period, along with bank and credit card statements, sales and purchase information, and details of any assets bought or sold. It also helps to have loan and finance agreements, details of any amounts owed to or by directors, and information about share capital and any changes to it during the year. If you use accounting software, giving us access is usually the quickest route. We will send you a tailored checklist once we understand your business, so you are not guessing what to send.

The way accounts are filed at Companies House is changing, with a move towards filing through software rather than paper or manual web filing, alongside wider reforms to company registration and filing obligations. There have also been consultations on what small and micro-entity accounts must include when submitted. Because these changes affect the practical mechanics of filing and, potentially, the content of what is placed on the public register, it is worth checking the current position before your next filing date rather than relying on how things were done a few years ago. We keep an eye on developments and can talk you through what applies to your company's next set of accounts.