FRS 105 Micro Entity Accounts in Leamington

FRS 105 is a UK financial reporting standard for companies that qualify for, and choose to apply, the micro-entities regime. It allows a much simpler set of financial statements than other frameworks: the accounts are generally prepared on a historical cost basis, certain fair value and revaluation treatments are not permitted, and the disclosure requirements are significantly reduced. The outcome is a concise balance sheet, profit and loss account and a small number of notes.

FRS 105 is intended for companies that fall within the UK micro-entities regime and decide to apply it. Two things have to line up: the company must meet the relevant size conditions, and it must not be excluded from the regime by any of the applicable rules. Because of this, meeting the size thresholds on their own does not automatically mean a company can — or should — use FRS 105. Eligibility is best confirmed by looking at the company's specific circumstances rather than assuming it applies.

No. The micro-entities regime is an available regime, not a mandatory one. A company that qualifies can choose to apply it and report under FRS 105, but it can equally choose to prepare its accounts under a different framework, such as FRS 102. The choice sometimes comes down to what the directors want from the accounts — for example whether they need a framework that permits fair value accounting or provides more extensive disclosures.

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. These conditions sit alongside other eligibility rules and exclusions, so satisfying 2 of the 3 does not by itself guarantee that the micro-entities regime is available. Conditions are also assessed in line with the relevant rules for the period in question.

Both are UK financial reporting standards, but they sit at different levels of complexity. FRS 105 is a slimmed-down framework for qualifying micro-entities, built on historical cost and with limited disclosure. FRS 102 is the standard used by a much wider range of companies and permits or requires more accounting treatments and far more disclosure. FRS 105 produces shorter, simpler accounts; FRS 102 produces more detailed ones. Moving between the two can affect how items are recognised and measured, so the change is worth planning rather than treating as a formality.

For a limited company, the annual accounts — including accounts prepared under FRS 105 — are filed with Companies House, by the statutory deadline that applies to that company. This is a separate exercise from filing a Corporation Tax Return with HMRC, and from filing a Confirmation Statement. Preparing the financial statements and submitting them are distinct steps, and it is worth keeping track of each one so nothing is missed.

Yes, they are separate. FRS 105 relates to the accounting and financial reporting framework used to prepare your company's financial statements. The CT600 is a Corporation Tax Return submitted to HMRC, dealing with the company's tax position. The two draw on the same underlying records and the figures are usually connected, but they are different documents with different purposes, different recipients and different filing processes.

Typically we would ask for your bookkeeping records or trial balance, bank statements and reconciliations, sales and purchase records, details of any fixed assets and loans, payroll information for the employee-number condition, and the previous year's accounts where available. Details of any unusual transactions, director's loans or group relationships are also useful, as these can affect eligibility or how items are presented. If some of this is missing, we can talk through what matters most for your period first.

A newly incorporated company is not automatically a micro-entity, and eligibility depends on the size conditions and other rules as they apply to that company. A first period is often shorter than twelve months, which can affect how the conditions are assessed, and there may be no comparatives to work from. The practical answer is that it is possible for a new company to fall within the regime, but it needs to be checked against its own figures rather than assumed.

The rules around company size and reporting have been updated in recent years, including the threshold levels used to determine which regime a company falls into for accounting periods beginning on or after 6 April 2025. Companies House filing requirements are also evolving, with a general direction of travel towards more digital, structured filing of accounts. Because the detail and timing of these changes matter, we recommend checking your position for the specific period you are preparing accounts for rather than relying on what applied in earlier years.