FRS 105 Micro Entity Accounts in Llangefni

FRS 105 is the UK financial reporting standard for micro-entities. It applies to companies that qualify for the micro-entities regime and choose to use it, and it is designed to keep statutory accounts as simple as possible. Under FRS 105, measurement is generally based on historical cost — revaluation and fair value accounting are not permitted — and the disclosure requirements are far lighter than under the frameworks used by larger companies. The accounts still need to be prepared properly and presented in the required format, which is why eligibility and the underlying figures are worth reviewing before the year end.

FRS 105 is available to companies that fall within the UK definition of a micro-entity and that decide to apply the micro-entities regime. The regime is intended for very small companies, so the size criteria matter, but size is not the only consideration — certain rules and exclusions can prevent a company from qualifying even where it looks small on paper. A company that qualifies is not obliged to use FRS 105 and may instead prepare its accounts under a different framework. The right approach is to check your specific circumstances and any relevant restrictions rather than assuming the answer from turnover alone.

No. Qualifying for the micro-entities regime does not force a company to apply it. FRS 105 applies when a qualifying company chooses the micro-entities regime; a qualifying company can instead prepare its accounts under a more comprehensive framework such as FRS 102, which offers more measurement options and requires fuller disclosures. Some companies prefer the extra detail, for example where a lender, investor or group requires it. It is a choice with practical consequences, so it is worth discussing which framework best suits your company's reporting needs before the accounts are prepared.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of the following 3 applicable size conditions: turnover of no more than £1 million, balance sheet total of no more than £500,000, and an average of no more than 10 employees. Meeting two of the three conditions is the starting point, not the whole test — other eligibility rules and exclusions can apply, and the position needs to be assessed against the relevant rules for your company and period. If you are close to any of the limits, it is worth reviewing your status carefully, because a change in circumstances can affect which regime you can use.

Both are UK financial reporting standards, but they are written for different sizes of company. FRS 105 is the micro-entities standard: it restricts measurement largely to historical cost, prohibits revaluation and fair value accounting, and requires a much smaller set of disclosures. FRS 102 is the wider framework used by small and larger entities, and it allows more accounting options along with more extensive disclosure requirements. FRS 105 therefore produces shorter, simpler financial statements, while FRS 102 gives a fuller picture and greater flexibility. A company that qualifies for the micro-entities regime can choose which of these frameworks to apply.

Yes. Statutory accounts for a limited company are delivered to Companies House, and where a company has prepared FRS 105 Micro Entity Accounts those are the accounts filed. The filing must follow Companies House requirements for the format and content of what is delivered, and it is a separate exercise from dealing with HMRC. Filing arrangements have been changing, including a move towards filing accounts using commercial software rather than paper or web-based routes, so it is worth confirming the current position for your filing before the deadline rather than relying on how things were done a few years ago.

Yes, they are two different things. FRS 105 Micro Entity Accounts are the statutory financial statements prepared under the micro-entities accounting framework and delivered to Companies House. A Corporation Tax Return, submitted as a CT600, is the tax filing made to HMRC to report the company's taxable profits and calculate what is owed. The figures in your accounts usually inform the tax computation, but the documents, the recipients and the rules behind them are distinct. Keeping that separation clear helps avoid confusion about what is being filed, with whom, and on what basis.

It can, in principle, if it qualifies as a micro-entity and chooses the micro-entities regime. A newly incorporated company has no trading history, so eligibility is assessed on its actual position and the applicable rules rather than on assumptions — a company with substantial start-up funding, significant assets or a larger workforce may not qualify even in its first period. It is also worth remembering that the framework chosen shapes the accounts from the outset, including how opening balances and early transactions are presented. If you are setting up or have recently set up a company in Llangefni, we can look at your circumstances and advise on the most suitable reporting framework.