FRS 105 Micro Entity Accounts in Llangeitho

FRS 105 is the UK financial reporting standard for micro-entities. It sets out the rules for preparing and presenting financial statements when a qualifying company applies the micro-entities regime. It is the most streamlined of the UK reporting frameworks, with a short balance sheet, a simple profit and loss account and limited disclosure requirements. It governs how the accounts are prepared and presented — it is not a tax return and it does not determine how much corporation tax your company pays.

FRS 105 is available to companies that qualify for the UK micro-entities regime and 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 conditions is not the whole story — other eligibility rules and exclusions can apply to particular types of company, so eligibility should always be checked against your specific circumstances before the regime is adopted.

No. The micro-entities regime is an accounting framework that qualifying companies may choose to apply; FRS 105 applies when that regime is used. A company that qualifies as a micro-entity may instead prepare its accounts under another framework, such as FRS 102 Section 1A for small entities, if that better suits its needs. Factors such as lender requirements, investor expectations, group reporting or the level of detail shareholders want can all influence that decision.

FRS 102 is a broader financial reporting standard used by a wide range of UK companies, and it includes a reduced-disclosure section for small entities. FRS 105 sits below that and is designed for micro-entities only. In practice, FRS 105 involves fewer notes, a simpler presentation and simpler measurement rules, while FRS 102 allows or requires more detailed treatment of certain items. Because the measurement rules differ, the profit reported under FRS 105 can differ from the profit that would be reported under FRS 102 for the same period.

Yes — where a company is required to file annual accounts, the FRS 105 financial statements form the basis of the accounts delivered to Companies House, subject to the filing options available to small and micro-entity companies. Filing is a separate step from preparing the accounts, with its own requirements, and the position can vary depending on your company's circumstances. It is worth reviewing the current filing requirements each year rather than assuming the previous year's approach still applies.

Yes, they are two distinct things. FRS 105 Micro Entity Accounts are the company's financial statements, prepared under the micro-entities regime. A CT600 is a Corporation Tax Return submitted to HMRC, and it is calculated under tax rules rather than accounting rules. Because the two use different rules, taxable profit will often differ from the accounting profit shown in the accounts — for example through capital allowances or disallowable expenses. We can help coordinate both so the figures are consistent and the differences are explained.

A newly incorporated company can potentially use FRS 105 from its first accounting period, provided it qualifies as a micro-entity under the applicable conditions and the directors choose to apply the regime. Eligibility is assessed for the period in question and is not automatic, and some types of company are excluded from the regime altogether. For a first set of accounts, it is particularly worth taking advice on the framework and on what records you need to keep, because those early decisions shape how straightforward later periods will be.

Useful starting points include your bookkeeping records or accounting software export, bank statements and reconciliations, sales and purchase invoices, payroll information, details of assets bought or sold, loan and hire purchase agreements, share capital details, and the previous year's accounts if there are any. If you also want us to look at the corporation tax position, information on expenses, capital purchases and any other income helps. The cleaner and more complete your records, the more efficiently your FRS 105 Micro Entity Accounts can be prepared.

Companies House has been introducing changes to company filing requirements, including a gradual move towards accounts being filed in a structured digital format through software rather than as simple PDF attachments, along with changes to the filing options available to small and micro-entity companies. The detail and timing of these changes matter, and they can affect how your accounts need to be submitted. Rather than rely on assumptions or outdated guidance, it is sensible to check the current position each year — we can talk you through what applies to your company in Llangeitho when the time comes.