FRS 105 Micro Entity Accounts in Liverpool

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It is the most simplified accounting framework available in the UK, designed so that a qualifying micro-entity can prepare financial statements without the more extensive disclosures and accounting options found in fuller standards. In practice, FRS 105 accounts concentrate on the balance sheet and profit and loss account, applying a straightforward set of permitted accounting treatments.

FRS 105 is intended for companies that qualify for the micro-entities regime and then choose to apply it. 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. Meeting those size tests is not the whole picture — other eligibility rules and exclusions can apply, so eligibility should be checked against your company's own circumstances rather than assumed.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that qualifies can choose to apply it, and FRS 105 applies when that choice is made. Some qualifying companies prefer to report under FRS 102 instead — for example where a lender, investor or group parent expects a fuller set of disclosures, or where the company wants to use accounting treatments that FRS 105 does not permit.

The main difference is the level of simplification. FRS 105 is tailored to micro-entities and restricts certain accounting options: for example, revaluation and fair value measurement are generally not available, and disclosure requirements are far more limited. FRS 102 is a fuller framework used by a much wider range of companies, offering more accounting policy choices and requiring substantially more disclosure. Choosing between them is a question of eligibility, who relies on the accounts, and what the company needs the financial statements to show.

Yes — a company's annual accounts, including micro-entity accounts prepared under FRS 105, form part of its Companies House filing obligations. Micro-entity accounts can generally be filed with reduced disclosures compared with larger companies, and Companies House sets out the accepted filing formats and routes. Filing accounts at Companies House is separate from filing a Corporation Tax Return with HMRC, and also separate from filing a Confirmation Statement.

Yes, they are two distinct filings. FRS 105 Micro Entity Accounts are the company's financial statements, prepared under the micro-entities regime and filed at Companies House. A CT600 is a Corporation Tax Return submitted to HMRC, which includes tax computations based on the company's taxable profits rather than simply reproducing the accounts. The figures in the accounts usually feed into the tax return, but the preparation, submission and deadlines are handled separately.

A newly incorporated company can use FRS 105 for its first set of accounts if it qualifies for the micro-entities regime and chooses to apply it for that period. Because a new company has no trading history, eligibility is usually assessed on its first accounting period figures and on whether any exclusion applies. It is worth confirming this before the first accounts are prepared, since some companies are excluded from the regime regardless of size.

Typically you will need complete bookkeeping records for the period, bank statements and reconciliations, sales and purchase information, details of any stock or work in progress, a list of fixed assets with purchase dates and costs, details of loans and other liabilities, payroll and director information, and the previous year's accounts where relevant. Anything unusual during the period — a new loan, a significant equipment purchase, or a change in how the business operates — is also useful to flag so it can be treated correctly.

Companies House has been moving towards filing accounts through commercial software rather than its own web forms, and there have been reforms and consultations around the information small and micro-entity companies need to file, including the possibility of submitting profit and loss figures alongside the balance sheet. The detail and timing are set by Companies House and can change, so it is worth checking current guidance and making sure your records are complete enough to support whatever is required when your filing is due.

No. Qualifying for the micro-entities regime does not oblige you to use it. FRS 105 is a choice, and it should be made with your circumstances in mind — how the accounts will be used, what your lender or investor expects, and whether any other party needs a fuller set of financial statements. If FRS 105 is not suitable, another framework may be more appropriate even where the size conditions are met.