FRS 105 Micro Entity Accounts in Glastonbury

FRS 105 is the UK financial reporting standard for entities that apply the micro-entities regime. It forms part of UK GAAP and sets out how a micro-entity's annual financial statements should be prepared, including the format of the balance sheet and profit and loss account, how items are measured and which limited notes are required. Compared with the standards used by small and larger companies, it is deliberately streamlined: measurement is kept simple, there is far less disclosure, and the accounts are shorter and easier to read. FRS 105 applies when a qualifying company has chosen to use the micro-entities regime for that accounting period.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that qualifies may choose to apply it, but it may equally decide to prepare accounts under a different framework, such as the small companies regime with FRS 102 Section 1A, where that is appropriate for its circumstances. FRS 105 applies when the micro-entities regime is the regime that has been chosen. It is also worth noting that once a framework is applied, the choice should be made consistently and with an eye on future years, so it is worth discussing the decision rather than defaulting to it.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of the following 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 during the period. Meeting the size conditions is not the whole story, though. Other eligibility rules, exclusions and specific circumstances can affect whether the micro-entities regime is available, so thresholds alone should not be treated as confirmation that a company qualifies. The position also needs checking each year, because a growing company can move out of the regime.

Both sit within UK GAAP, but they are aimed at different sizes of company and offer different levels of flexibility and disclosure. FRS 105 is the micro-entities standard: it is highly simplified, with restricted measurement options and a much shorter set of notes. FRS 102 is used by small and larger entities, with Section 1A providing the small companies variant; it allows more accounting policy choices and requires considerably more disclosure. In practice, choosing FRS 105 means simpler, more compact FRS 105 financial statements, while FRS 102 gives more detailed information to readers such as lenders. The right choice depends on your size, your circumstances and who needs to see the accounts.

If you run a limited company, annual accounts generally have to be filed at Companies House, and micro-entity accounts prepared under FRS 105 are usually filed in the simplified micro-entity format. Filing usually involves submitting the balance sheet and the relevant notes rather than the full profit and loss account, which is why directors often find the filing simpler than the preparation work behind it. The accounts also need to be issued to the company's members. The deadline that applies to your company depends on its own year end and filing history, so check the date that applies to you rather than assuming a fixed period.

Yes, they are two different things. FRS 105 accounts are the financial statements prepared under the micro-entities regime; a Corporation Tax Return (CT600) is a separate submission made to HMRC to report taxable profits and calculate the corporation tax due. The accounts figures are usually the starting point for the tax return, but the tax computation then adjusts for items such as disallowable expenses, capital allowances and other timing differences. Filing your accounts at Companies House does not settle your corporation tax position, and filing a CT600 does not replace the accounts. Both need to be dealt with, and the figures will often differ.

The exact list depends on how your business operates, but most directors find it useful to gather: bank and credit card statements covering the period, sales invoices and receipts, purchase invoices and expense records, payroll or subcontractor information, details of equipment, vehicles or other assets bought or sold, loan agreements and director's loan balances, stock or work in progress figures, and a copy of the previous year's accounts. If your bookkeeping is up to date in accounting software, giving us access is usually the quickest route. If records are incomplete, we can help piece them together — it just takes a little longer, so earlier is better.

Companies House has been introducing changes to the way accounts are filed as part of wider company law reform, including a move towards accounts being filed using commercial or third-party software rather than manually entering figures online. Transitional arrangements have been built into the timetable, and the detail continues to develop. Because the position can change, it is sensible to check the current Companies House guidance for your filing year, or ask us to confirm what applies to your company, rather than relying on information you read some time ago. For many Glastonbury directors, the practical impact is a change in how the accounts are submitted rather than in how they are prepared.