FRS 105 Micro Entity Accounts in Hamilton

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It sets out how qualifying micro-entities prepare their annual financial statements, allowing a simplified format and a much reduced level of disclosure compared with larger reporting frameworks. FRS 105 accounts are generally prepared on a historical cost basis, which means assets and liabilities are recorded at their original cost rather than being regularly revalued. It is designed to make annual reporting more proportionate for the smallest companies.

FRS 105 is available to companies that qualify for the UK micro-entities regime and then choose to apply it. Qualifying is not simply a matter of being small — the company has to meet the relevant size conditions and must not fall within any of the rules or exclusions that prevent micro-entity treatment. Some companies, for example certain types of regulated or group entities, may be excluded regardless of their size. Because eligibility depends on your specific circumstances, it is worth having it checked rather than assumed.

No. The micro-entities regime is an available accounting regime rather than a mandatory one. A company that qualifies can choose to apply it, but it can equally choose to prepare its accounts under a different framework, such as the small companies regime with the reduced disclosure options available under FRS 102. In practice the choice often comes down to what the accounts are used for — for example whether a bank, investor or parent company needs a greater level of detail than FRS 105 provides.

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. Those conditions are subject to the relevant rules and exclusions, and meeting two of the three does not guarantee eligibility on its own. Certain companies are excluded from the regime whatever their size, so the criteria should always be considered alongside the company's individual circumstances.

FRS 102 is the broader UK financial reporting standard that applies to most companies that are not micro-entities, including those using the small companies regime with its reduced disclosure options. FRS 105 is narrower and more streamlined: it is written only for micro-entities and allows a simpler format, fewer notes and a historical cost basis. FRS 102 gives more scope for accounting policy choices and requires more disclosure, which can be helpful where third parties need additional detail. Neither is automatically better — it depends on who will read the accounts and why.

Yes, where a company has prepared FRS 105 Micro Entity Accounts, those accounts are the ones submitted to Companies House as the company's annual accounts, provided the company is required to file. Filing accounts at Companies House is a separate obligation from filing a Corporation Tax Return with HMRC. The deadline for delivery depends on the company's type and its accounting reference date, so it is always worth checking the current Companies House guidance or confirming the position for your own company rather than relying on general assumptions.

Yes, they are two distinct filings with two different purposes. Your FRS 105 Micro Entity Accounts are the financial statements prepared under the micro-entities regime and filed with Companies House. Your Corporation Tax Return, normally submitted as a CT600, is a tax filing sent to HMRC that calculates the company's taxable profits and the tax due. The two usually start from the same accounting records, and adjustments may be needed to move from accounting profit to taxable profit, but one does not replace the other and each has its own submission route.

A newly incorporated company may be able to use FRS 105 if it qualifies for the micro-entities regime and chooses to apply it. New companies still need to consider the size conditions in the context of their first accounting period, as well as any exclusions that might apply to their activity. A brand new company with limited transactions will often fall comfortably within the size conditions, but qualification should still be confirmed rather than assumed, and the framework chosen should suit how the business is expected to develop.

As a starting point, you would normally need your company's bank statements and reconciliations for the period, sales and purchase records, details of any money owed to or by the company, payroll information if you employ staff, records of assets such as equipment or vehicles, and details of any loans or directors' balances. Your previous year's accounts are useful for comparison, and any relevant correspondence from Companies House or HMRC helps confirm the company's position. Having this information gathered in good time makes the preparation process smoother and reduces the number of queries raised along the way.

Companies House has been making changes to the way accounts are delivered, including a move towards filing through software rather than the older web-based filing route. Requirements and timings are set by Companies House and are introduced in stages, so the practical answer is to check the latest official guidance for your filing period rather than relying on information that may be out of date. The underlying FRS 105 accounting requirements and the eligibility conditions for the micro-entities regime are a separate matter from the mechanics of how accounts are submitted.