FRS 105 Micro Entity Accounts in Guisborough

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It is the standard that sets out how qualifying micro-entity companies prepare their annual financial statements when they choose to apply that regime. It uses simplified recognition and measurement rules and requires a reduced level of disclosure compared with other UK reporting frameworks, which is why micro-entity accounts are typically shorter and simpler than accounts prepared under FRS 102. It is an accounting framework, not a tax regime, and it governs the financial statements rather than your Corporation Tax position.

FRS 105 is intended for companies that qualify for the micro-entities regime and decide to apply it. Qualifying is not automatic, and it is not simply a matter of being small. A company generally needs to satisfy the size conditions that apply to the micro-entities regime, and there are further rules and exclusions that can prevent a company from being eligible even where the size conditions appear to be met. Some company types are excluded from the regime altogether. Meeting the size conditions is therefore a starting point for a conversation rather than a guaranteed route into the framework.

No. The micro-entities regime is an available option, not an obligation. A company that qualifies for the regime can choose to apply it, in which case FRS 105 is the standard used to prepare its financial statements. Alternatively, a qualifying company may choose to prepare its accounts under another framework, such as FRS 102, which can sometimes be preferable — for example where a lender, investor or group requires a fuller set of disclosures. The decision is usually worth reviewing each year, because a company's circumstances and the needs of the people reading its accounts can change.

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 during the period. These conditions are subject to the relevant rules and exclusions, and certain types of company cannot use the regime regardless of size. Because the detail matters, it is worth checking your specific position rather than assuming that crossing one threshold settles the question either way.

Both are UK accounting standards, but they are aimed at different audiences and produce different accounts. FRS 105 is the micro-entities standard: it uses simplified measurement rules, a prescribed format and a much lighter disclosure burden. FRS 102 is the standard generally used by small and medium-sized companies outside the micro-entities regime; it allows more accounting policy choices, recognises certain items differently and requires more extensive notes to the accounts. In practice, FRS 105 accounts are shorter and more streamlined, while FRS 102 accounts give readers more detail. Which is appropriate depends on whether your company qualifies for the micro-entities regime and whether you choose to apply it.

Where a company is within the accounts filing requirements, its annual accounts — including accounts prepared under FRS 105 — are delivered to Companies House, alongside the other filings that apply to the company. The requirement to file accounts comes from company law rather than from the accounting standard itself; FRS 105 governs how the accounts are prepared, not whether they must be filed. Companies House does not review accounts for accounting standards compliance or endorse them, so responsibility for preparing them on the correct basis rests with the company and whoever prepares them.

Yes, they are two distinct things. FRS 105 accounts are the company's financial statements, prepared under the micro-entities regime and filed at Companies House where required. A CT600 is a Company Tax Return submitted to HMRC to report the company's Corporation Tax position, and it is calculated under tax rules rather than accounting standards. Because accounting treatment and tax treatment can differ, the figures in your FRS 105 accounts will not simply be copied across to the CT600 — adjustments are commonly needed. A Confirmation Statement is a third, separate filing that confirms the information held on the register about your company.

Preparation normally begins with the company's records for the accounting period: bank and credit card statements, sales and purchase records, payroll information, details of any assets bought or sold, loan and finance agreements, and any previous year's accounts. It also helps to know whether the company has any unusual transactions, has changed its activities, or has requirements from a lender or other party that might affect how the accounts are presented. If you are unsure how the micro-entities regime applies to your company, a short review of your circumstances is usually the best starting point.