FRS 105 Micro Entity Accounts in Ongar

FRS 105 is the UK financial reporting standard for qualifying micro-entities. It applies when a company is eligible for the micro-entities regime and chooses to apply it. The framework is deliberately simplified: it allows a shorter balance sheet, a shorter profit and loss account and far fewer disclosure notes than larger reporting standards. The idea is that the very smallest companies should not have to produce detailed disclosures that add little practical value, while the figures themselves still need to be accurate and consistent with the company's records.

FRS 105 is intended for companies that qualify as micro-entities and decide to apply the micro-entities regime. 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 by itself the whole story — other eligibility rules and exclusions can affect whether the regime is available, and some companies are excluded from it. Because eligibility depends on individual facts, it is worth reviewing your company's position before assuming FRS 105 applies.

No. The micro-entities regime is an available accounting regime, not an automatic requirement. A company that qualifies as a micro-entity can choose to apply it, and FRS 105 applies when that choice is made. Some qualifying companies prefer to use a different framework, such as FRS 102, often because of the way turnover recognition, assets or particular transactions are treated, or because a lender or investor prefers a fuller set of statements. If your company does not qualify as a micro-entity, FRS 105 cannot be used at all.

Both are UK financial reporting standards, but they are aimed at different sizes of company. FRS 105 is the micro-entity standard, offering a much simpler format and heavily reduced disclosures. FRS 102 is the standard used by a far wider range of companies and includes more detailed recognition and measurement guidance, more required disclosures, and options such as the small company regime with its own set of reduced requirements. In practice the main differences you notice are the length and detail of the financial statements, the level of notes required, and how certain items are measured.

Where a company prepares and files annual accounts, those financial statements — including accounts prepared under FRS 105 — are normally filed with Companies House, alongside the required supporting information. Filing accounts is a company obligation governed by the rules that apply to your company, so the exact requirements depend on your circumstances, for example whether you are filing your first accounts or submitting a subsequent set. The accounts reflect the accounting framework chosen; they are not something Companies House or HMRC approves or endorses in advance, and any review that takes place is part of the normal filing process.

Yes, they are different things. FRS 105 Micro Entity Accounts are the company's financial statements, prepared under the micro-entity framework and filed with Companies House. A CT600 is a Corporation Tax Return submitted to HMRC, which deals with the company's taxable profits, allowances and tax position. The financial statements usually provide the starting point for the tax computation, but the tax return is a separate document with its own information requirements and its own submission to HMRC. It is worth keeping both in mind so that nothing is missed.

A newly incorporated company can potentially use FRS 105, but it needs to qualify as a micro-entity and choose the regime. New companies often have no turnover in their first period, which can place them comfortably within the size conditions, but eligibility also depends on the balance sheet total, employee numbers and whether any exclusions apply — for instance, if the company is part of a group or is a particular type of entity. The first set of accounts also follows specific rules about the period they cover, so it is worth taking advice early rather than assuming the framework applies.

Typically we ask for your bookkeeping or accounting records for the period, bank and credit card statements, sales and purchase documentation, payroll and employee information, details of stock or work in progress where relevant, and records of assets, loans and any other balances. It also helps to have the previous year's accounts, the company's registration details and any information about changes during the period, such as new equipment, a change in activity or a new loan. The better the underlying records, the more straightforward the preparation process tends to be.

Company filing requirements in the UK have been changing, including a move towards filing accounts and other information digitally, and reforms affecting what small and micro-entity companies submit. Because the rules and timescales are set externally and can change, the most reliable approach is to check your company's specific position each year rather than relying on how things worked previously. We keep the preparation of your FRS 105 Micro Entity Accounts aligned with the requirements that apply at the time.