FRS 105 Micro Entity Accounts in Nottingham

FRS 105 is a UK accounting standard designed for companies that qualify for the micro-entities regime. It sets out how those companies prepare their annual financial statements when they choose to apply that regime. It takes a simpler approach than the standards used by larger companies: assets and liabilities are generally measured at historical cost rather than fair value, and the required notes to the accounts are much shorter. In practice, this produces concise, readable accounts that still show the company's financial position and performance.

FRS 105 is available to companies that both 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 these 3 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 the size conditions does not automatically mean a company can use the regime, because other rules and exclusions apply, and some types of entity are not eligible at all. If you are unsure whether your Nottingham company qualifies, it is worth reviewing your position before the accounts are prepared.

No. The micro-entities regime is an available accounting regime rather than a mandatory one, and FRS 105 applies when a qualifying company chooses to use it. A qualifying company could instead prepare its accounts under a different framework, such as FRS 102, which requires more disclosure and can involve different measurement rules. The choice can affect how the accounts look, what information appears in the notes and how easily the figures can be compared with previous periods. It is a decision worth making deliberately, ideally before the year-end accounts are drafted.

Both are UK accounting standards, but they are aimed at different sizes of company and they differ in complexity. FRS 105 is the micro-entities standard and keeps measurement simple, typically at historical cost, with limited disclosure in the notes. FRS 102 is a broader standard with fuller recognition, measurement and disclosure requirements, and it includes a reduced-disclosure option often used by small companies that do not apply the micro-entities regime. In general terms, FRS 105 produces the shortest set of accounts, while FRS 102 gives a more detailed picture. The right framework depends on eligibility, the company's circumstances and what the directors want the accounts to show.

If a company is required to file annual accounts, those accounts must be delivered to Companies House, and where the micro-entities regime has been chosen the accounts will have been prepared under FRS 105. Filing is a separate step from preparing the accounts, with its own deadlines and delivery requirements, so it is worth planning both. The financial statements are also prepared for the company's members, and the directors remain responsible for approving them and for making sure the company meets its filing obligations on time.

Yes, they are two different things. FRS 105 Micro Entity Accounts are financial statements prepared under the micro-entities regime and used for company reporting. A Corporation Tax Return (CT600) is a tax filing submitted to HMRC, and it starts from the company's accounts but then applies tax rules and adjustments that do not always match the figures in the accounts. The two also have separate submission requirements and separate deadlines. Preparing the accounts is therefore an important step, but it does not on its own settle the company's Corporation Tax position.

Good records make the process smoother. Helpful information typically includes your bookkeeping or accounting software records, bank and credit card statements for the period, sales invoices and purchase documentation, payroll and pension information if you employ staff, details of any loans, hire purchase or lease agreements, and information about assets bought or sold, such as equipment or vehicles. It also helps to know about anything unusual during the period, such as a change in activity, a one-off transaction or a director's loan. If some records are missing, tell us early so we can work out how to deal with it.

Companies House has been introducing changes to how accounts are filed, including a move towards filing accounts in a structured, software-based format and changes to some of the filing options previously available to smaller companies. Because these changes are being phased in and the detail can affect how accounts are prepared and delivered, it is worth checking the current Companies House guidance for your filing period rather than relying on how things were done a few years ago. We can talk through what the current requirements mean for your company and how to prepare for them.