FRS 105 Micro Entity Accounts in Morley

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It sets out how the balance sheet, profit and loss account and notes should be prepared for qualifying micro-entities, with a simplified format and fewer disclosure requirements than the fuller frameworks. It is a financial reporting standard, not a tax regime, and it sits within the wider set of UK accounting standards that companies can apply.

FRS 105 is intended for 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. Other eligibility rules and exclusions can apply, so meeting the size conditions alone does not automatically guarantee that a company qualifies, and the choice of framework should always be considered in light of the company's own circumstances.

No. The micro-entities regime is an available accounting regime rather than a mandatory one. A company that qualifies for it can choose whether to apply it, and FRS 105 applies when that choice is made. Some qualifying companies prefer a framework with more extensive disclosure, such as FRS 102, particularly where lenders, investors or group arrangements call for more detail. The right choice depends on who will use the accounts and what they need from them.

For accounting periods beginning on or after 6 April 2025, the size conditions are 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. A company generally needs to meet at least 2 of these 3 conditions to fall within the size test, but the rules also include exclusions and additional considerations — for example, certain company types and circumstances are treated differently. Because of this, eligibility should be assessed carefully rather than assumed from the headline figures.

Both are UK financial reporting standards, but they are aimed at different sizes of company. FRS 105 is the micro-entities standard and is far more concise, with a simpler presentation and a much shorter list of required disclosures. FRS 102 is the standard used by a broader range of companies and generally requires more detailed accounting treatments, more notes and more judgement. FRS 105 is designed to reduce the reporting burden for the smallest companies, while FRS 102 gives readers a fuller picture of the business.

FRS 105 accounts are the company's statutory financial statements, and where a company is required to file accounts at Companies House those accounts need to be delivered there. Micro-entity accounts can be filed in a simplified form, which is one of the practical attractions of the regime. Filing the accounts is a separate exercise from submitting a Corporation Tax Return — the accounts go to Companies House, while your tax position is reported to HMRC through a CT600. Your Confirmation Statement is another separate filing again.

Yes, they are separate documents with separate purposes and separate recipients. FRS 105 Micro Entity Accounts are financial statements prepared under the micro-entities framework and filed at Companies House where required. A CT600 is the Corporation Tax Return submitted to HMRC to report the company's taxable profits and calculate the tax due. The figures in the two documents are usually closely related, but they are not interchangeable, and adjustments that apply for tax purposes do not necessarily change how the accounts themselves are presented.

A newly incorporated company can apply the micro-entities regime if it qualifies and chooses to do so. In the first period, the size assessment works differently from a company with an established track record because there is no prior year to compare against, and the rules for first accounting periods need to be considered. Exclusions also apply to some companies regardless of size. For a new company in Morley, the sensible approach is to look at expected activity levels alongside the eligibility rules before deciding which framework to use for the first set of accounts.

In most cases you will need your bookkeeping or accounting records for the period, bank and credit card statements, sales and purchase documentation, payroll information, details of any loans or finance agreements, a list of assets with their values, and information about share capital, directors and any dividends paid. Bringing these together early makes the preparation process smoother and reduces the number of follow-up questions. If your records are incomplete or held in more than one place, we can help you work out what is missing before preparation begins.