FRS 105 Micro Entity Accounts in Normanton: Straightforward Financial Reporting for Qualifying Companies

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It is formally titled the Financial Reporting Standard applicable to the Micro-entities Regime and sits alongside other UK standards such as FRS 102. It sets out how qualifying micro-entity companies should measure and present the items in their annual financial statements, with a deliberately streamlined approach compared with the fuller standards. In practice, FRS 105 companies typically prepare a simpler balance sheet, a profit and loss account and a limited set of notes, which keeps the accounts shorter and easier to read.

FRS 105 is available to companies that both qualify for the UK micro-entities regime and choose to apply it. Qualifying means satisfying the relevant size conditions for the period and not falling within any of the exclusions that apply to the regime. It also means the company is not required to use a different framework — for example, certain types of entity are outside the regime regardless of size. Because eligibility depends on the company's own facts, it is worth reviewing your position rather than assuming. A newly incorporated company may qualify, but that depends on its activities and figures, not simply on its age.

No. The micro-entities regime is an available regime, not a mandatory one. A company that qualifies as a micro-entity can choose to apply it, and FRS 105 applies when that choice is made. A qualifying company could instead report under FRS 102, which offers different measurement options and requires more disclosure. The decision usually comes down to whether the simpler approach suits your circumstances — for instance, whether the company holds assets that would be treated differently under FRS 102, or whether lenders or other parties expect a fuller set of statements.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of the 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 story. Other eligibility rules and exclusions apply, and certain companies are outside the micro-entities regime altogether. The conditions also have to be assessed in line with the relevant rules rather than by picking a single figure, so it is sensible to check your specific position before deciding on a framework.

Both are UK financial reporting standards, but they serve different sizes of company and offer different levels of flexibility and disclosure. FRS 102 is the broader standard used by many small and medium-sized companies, and it permits various accounting and measurement options along with a fuller set of disclosures. FRS 105 is deliberately more restricted: it limits the measurement choices available and requires far fewer notes, which makes it quicker to prepare and simpler to interpret. In some cases the restricted approach in FRS 105 produces different figures from those you would see under FRS 102, which is one reason the choice of framework matters.

Yes. Companies with statutory accounts obligations generally have to file their accounts with Companies House, and that applies whether the accounts are prepared under FRS 105 or another framework. The content and presentation of the filed accounts follow the framework chosen, so micro-entity accounts will look different from those prepared under FRS 102. The filing must be made within the statutory deadline that applies to your company's accounting reference date. Companies House has also been introducing changes to how accounts are filed, including a move towards filing through software, so it is worth checking the current requirements before you submit.

Yes — they are two distinct exercises. FRS 105 Micro Entity Accounts are the company's statutory financial statements, prepared under the accounting framework and filed with Companies House. A Corporation Tax Return (CT600) is a tax filing submitted to HMRC, and it starts from the company's accounts but applies tax rules that can adjust the figures, for example in relation to disallowable expenses or capital allowances. The two are prepared on different bases and submitted to different bodies, so treating them as one and the same can lead to unnecessary confusion.

As a starting point, we would normally need the company's accounting period dates, its financial records for that period, bank statements and reconciliations, details of sales and purchases, payroll and employee information, and records of any assets, liabilities, loans or director transactions. Details of share capital and any changes during the year are also relevant. Having records that are complete and up to date makes the process considerably smoother, and it helps to flag anything unusual early, such as a one-off transaction or a change in activity. If you are unsure what is required, we can give you a simple checklist based on your circumstances.