FRS 105 Micro Entity Accounts in Hamble

FRS 105 is the UK financial reporting standard that applies to micro-entities preparing accounts under the micro-entities regime. It is a simplified, historical cost based framework, which means assets and liabilities are generally carried at cost rather than at revalued or fair value amounts, and the disclosure requirements are much shorter than those in larger standards. A company preparing FRS 105 Micro Entity Accounts still produces a balance sheet and the notes needed to explain it, but without the volume of detail that a larger company would have to include.

FRS 105 is intended for UK companies that qualify as micro-entities and choose to apply the micro-entities regime. Qualifying depends on the size conditions being met and on additional eligibility rules and exclusions — for example, certain group structures and certain types of activity can affect whether the regime is available. Meeting the size thresholds is a key part of the test, but it is not the whole picture, so eligibility should be checked against your company's specific situation rather than assumed.

No. The micro-entities regime is an option, not an obligation. A company that qualifies may choose to apply FRS 105, or it may decide to prepare its accounts under a different framework, such as FRS 102. Some businesses prefer a fuller framework because of lender requirements, investor expectations, group reporting or the way they want their results presented. In other cases the simplified approach of FRS 105 Micro Entity Accounts is a good match. The decision is yours once eligibility is confirmed.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of the 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 are the headline size tests, and the relevant rules and exclusions still apply on top of them, so a company that satisfies 2 of the 3 conditions is not automatically guaranteed to qualify. Different limits applied to earlier accounting periods, which is why the period start date matters.

FRS 102 is the broader UK financial reporting standard used by many small and medium sized companies, and it permits or requires a wider range of accounting treatments such as revaluations, fair value measurement, deferred tax and more extensive notes. FRS 105 is narrower and simpler: it is designed around historical cost, it allows far fewer accounting policy choices, and it asks for a much shorter set of disclosures. In practice, moving between the two can change the figures reported as well as the length of the accounts, so the choice should be made with your circumstances in mind.

Yes. A company that prepares FRS 105 Micro Entity Accounts for its members still has to file accounts at Companies House for the financial year. Micro-entity accounts filed there are typically shorter than the full accounts prepared for the members — usually a balance sheet with limited notes rather than a full profit and loss account, income statement and directors' report. The accounts filing is a separate task from your Corporation Tax filing, and both need to be dealt with on their own timetable.

Yes, they are two different things. FRS 105 Micro Entity Accounts are the financial statements prepared under the accounting framework for the company's financial year. The CT600 is the Corporation Tax Return submitted to HMRC, which reports the company's taxable profits and is supported by a tax computation that starts from the accounts but then makes tax adjustments, such as adding back disallowable expenses or claiming capital allowances. Preparing the accounts does not automatically complete the tax return, and the two documents serve different purposes and go to different bodies.

It can, in principle, if it qualifies for the micro-entities regime — but a first accounting period needs particular care. A newly incorporated company may have a first period that is longer or shorter than twelve months, may have limited activity, and may have start-up costs and initial transactions that need to be treated correctly. Eligibility also has to be assessed against the conditions that apply to that period. It is worth checking the position early so the bookkeeping is set up in a way that makes preparing FRS 105 Micro Entity Accounts straightforward.

Companies House has been moving towards a more digital filing process, including a requirement to file accounts using software, and there has been consultation about small and micro-entity accounts including a profit and loss account in what is filed publicly in future. The detail and the timing of these changes can evolve, so it is sensible to check the latest Companies House guidance before each filing rather than relying on how things were done previously. If you instruct us, we keep the filing approach under review so your FRS 105 Micro Entity Accounts are submitted in the way currently required.