FRS 105 Micro Entity Accounts in Frodsham

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It sets out simplified accounting, measurement and disclosure requirements for qualifying micro-entities, which means the resulting financial statements are generally shorter and less detailed than accounts prepared under FRS 102. FRS 105 Micro Entity Accounts typically comprise a profit and loss account, a balance sheet and a small number of supporting notes. It is an accounting framework, not a tax filing, so it deals with how your company's financial position and performance are reported rather than how much tax is payable.

FRS 105 is available to companies that qualify for the UK micro-entities regime and choose to apply it. Qualification depends on meeting the applicable size conditions and not falling within any of the relevant exclusions. For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of 3 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. Because other eligibility rules and exclusions can apply, meeting the size thresholds alone does not guarantee that the regime is available, so eligibility should be assessed on your company's specific circumstances.

No. The micro-entities regime is an available accounting regime rather than a mandatory one. A company that qualifies may choose whether to apply it, and FRS 105 applies to the financial statements when that choice is made. Some qualifying companies prefer to prepare accounts under FRS 102 instead — for example where a lender, investor, group parent or other user of the accounts wants more detail than the micro-entities regime provides. The decision is usually best made by looking at your company's reporting obligations alongside the needs of the people who rely on its accounts.

FRS 105 is the simpler of the two frameworks. It is designed specifically for micro-entities and permits simplified measurement and substantially reduced disclosure, so FRS 105 Micro Entity Accounts tend to be shorter and more stream�lined. FRS 102 applies to a much wider range of small and medium-sized entities, including those using its small entities provisions, and generally requires more detailed disclosures and more complex accounting treatments. Some individual accounting treatments also differ between the two, so the framework that suits your company depends on its size, its activities and who will be reading the accounts.

Where a company prepares FRS 105 accounts as its statutory financial statements, those accounts form part of what the company must deliver to Companies House, along with the other information required for that filing. The accounts need to be prepared from the company's financial records and presented in accordance with the applicable framework. Filing requirements can differ depending on the type of company and the accounts in question, so it is worth confirming the position for your own company rather than assuming a single set of rules applies to everyone.

Yes. FRS 105 Micro Entity Accounts are the statutory financial statements prepared under the micro-entities regime and, for a limited company, filed at Companies House. A CT600 is a separate Corporation Tax Return submitted to HMRC to report the company's tax position, and it is based on figures adjusted from the company's accounts. Preparing and filing one does not discharge the other, so both need to be dealt with. A Confirmation Statement is a third, separate filing and does not replace either.

Potentially, if the company qualifies for the micro-entities regime in its first accounting period and chooses to apply it. A newly incorporated company with modest activity will often fall within the size conditions, but eligibility is not automatic and exclusions can apply to certain entities. It is also possible to qualify in one period and not in another, which is why the framework is usually reviewed before each set of accounts is prepared. Checking the position early can help avoid having to change approach partway through the reporting process.

In most cases, we would need your bookkeeping records for the period, bank statements and reconciliations, sales and purchase records, payroll information, details of any assets, liabilities, loans or agreements, and the company's registered details. Where prior accounts exist, those are helpful too, as they provide a starting point and highlight anything that needs to be carried forward. Once the records are assembled, the figures can be compiled into financial statements presented in line with FRS 105 and the micro-entities regime.