FRS 105 Micro Entity Accounts in Haddington

FRS 105 is the UK financial reporting standard for micro-entities. It sets out how a qualifying micro-entity that has chosen to apply the micro-entities regime recognises, measures and presents the items in its annual financial statements, and what it needs to disclose. It is derived from FRS 102 but is deliberately more streamlined, with reduced disclosure requirements and simpler measurement rules, which suits the straightforward trading companies that typically use it.

FRS 105 is available to companies that qualify as micro-entities under the UK micro-entities regime and that choose to apply it. Qualification depends on meeting the applicable size conditions as well as clearing any exclusions and other rules that apply — for example, certain types of entity are excluded from the regime altogether, and additional considerations can apply to parent companies and groups. Meeting the size conditions does not, on its own, guarantee that the regime is available or appropriate, so eligibility is best confirmed against your company's specific circumstances before the accounts are prepared.

No. The micro-entities regime is an available accounting regime rather than a mandatory one. A company that qualifies for it can choose to apply it, in which case FRS 105 governs the accounts. If the company qualifies but decides not to use the micro-entities regime, a different framework will apply — most commonly FRS 102, or another standard if the company has particular characteristics. In practice, the choice often comes down to what the company needs from its accounts, such as whether it wants fair value accounting or more extensive disclosures.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of these 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. Those conditions sit alongside other rules and exclusions, so satisfying two of the three is the usual starting point rather than the whole test. Thresholds and rules can change, so it is worth checking the position that applies to your specific accounting period.

FRS 102 is the general UK financial reporting standard that applies to a wide range of companies, including small companies, and it allows options such as revaluation of certain assets and fair value measurement, with a fuller set of disclosure notes. FRS 105 is the micro-entity standard. It is simpler and more prescriptive: fewer accounting policy choices, no revaluations or fair value accounting, and a much shorter set of disclosures. FRS 105 is only available where the company qualifies for, and chooses to apply, the micro-entities regime.

Yes — for a company, the annual accounts are filed at Companies House, and FRS 105 Micro Entity Accounts are filed in the micro-entity format where that regime has been applied. Filing the accounts is separate from your Corporation Tax obligations. Equally, it is separate from the Confirmation Statement, which is a different filing altogether. Companies House has also been introducing changes to how accounts can be filed, including a move towards filing through software rather than a web form for small and micro-entity accounts, so it is sensible to check the current guidance before you submit.

Yes, they are separate. FRS 105 accounts are the financial statements prepared under the micro-entities regime and, for a company, filed at Companies House. A CT600 is a Corporation Tax Return submitted to HMRC, and it is computed from the company's taxable profits after any tax adjustments, which can differ from the profit shown in the accounts. They draw on the same underlying records, but they are different documents with different purposes and different submission routes.

A newly incorporated company can apply FRS 105 for a period in which it qualifies as a micro-entity and chooses to apply the micro-entities regime. New companies sometimes have a short or unusual first accounting period, and the size conditions are assessed on the period concerned using the rules that apply to it, so the position should be checked rather than assumed. If the company does not qualify, or prefers a different framework, FRS 102 or another applicable standard would be used instead.

Typically we would need your bookkeeping or accounting records for the period, bank statements and reconciliations, sales and purchase information, details of fixed assets and any additions or disposals, stock or work in progress where relevant, details of loans and director balances, payroll information for the average employee number, and a copy of the previous year's accounts for comparative figures. If you use cloud accounting software, giving us access is usually the quickest route.