FRS 105 Micro Entity Accounts in Penarth

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It is deliberately simplified: it uses a straightforward measurement basis, avoids some of the accounting complexities found in other standards, and requires a much shorter set of notes and disclosures. When a qualifying company chooses the micro-entities regime, FRS 105 Micro Entity Accounts are the financial statements it prepares and files. In practice, that means a clean, readable set of accounts covering the company's position and performance for the period.

FRS 105 is intended for companies that qualify for the micro-entities regime and decide to apply it. Qualifying is about more than being small in a general sense — the company needs to satisfy the applicable size conditions and must not fall within any of the rules or exclusions that prevent a company from being treated as a micro-entity. Meeting the size thresholds on their own does not guarantee eligibility, and the position can change if the company's turnover, balance sheet or headcount grows. Because the detail matters, eligibility is best confirmed by looking at your company's specific circumstances rather than assuming.

No. The micro-entities regime is an available option, not an obligation. A company that qualifies can generally choose the micro-entities regime and prepare FRS 105 accounts, or it can use another permitted accounting framework, such as FRS 102 with the small company disclosures. FRS 105 applies when the micro-entities regime is the route chosen. Some directors prefer a fuller reporting basis because of how the company is funded, what lenders or investors expect, or because of the way the business is structured, so the decision is worth taking deliberately rather than by default.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of 3 applicable size conditions to qualify as a micro-entity: 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. Those conditions are subject to the relevant rules governing how turnover, the balance sheet total and employee numbers are measured, and separate eligibility rules and exclusions can also apply. As a result, satisfying two of the three conditions does not, by itself, always mean a company qualifies.

Both are UK accounting standards, but they sit at different levels of complexity. FRS 105 is the micro-entities standard and is the most streamlined option: simpler measurement, fewer accounting judgements and minimal disclosure. FRS 102 is a broader standard, and the small company version (often referred to as Section 1A) allows for more detailed reporting and keeps accounting treatments that FRS 105 does not permit — for example around revaluations, certain financial instruments and deferred tax. In short, FRS 105 gives you simpler FRS 105 Micro Entity Accounts, while FRS 102 gives you a fuller picture with more disclosure.

Statutory accounts are normally filed with Companies House, and that includes FRS 105 Micro Entity Accounts where the company has chosen the micro-entities regime. Micro-entity accounts can be filed using the appropriate filing option for that set of accounts, and the accounts must be delivered within the statutory filing window that applies to the company for the period in question. Separately, a Corporation Tax Return (CT600) goes to HMRC — that is a different filing, made to a different body, for a different purpose, even though the two are connected through the figures your accounts show.

Yes, they are two distinct requirements. FRS 105 Micro Entity Accounts are the statutory financial statements prepared under the micro-entities regime and, in the usual case, filed with Companies House. A CT600 is a Corporation Tax Return submitted to HMRC to report the company's taxable profits and calculate the tax due. The accounts often provide the starting point for the tax computation, so the two are linked in practice, but they are prepared for different purposes, follow different rules in places, and are submitted to different authorities. Keeping them clearly separated in your own mind helps avoid confusion about what is filed where.

We would typically need the company's records for the accounting period: bank, credit card and payment platform statements, sales invoices and receipts, purchase invoices and expense receipts, payroll and wage information, details of assets bought, sold or disposed of, details of any loans, hire purchase or finance agreements, and any stock or work in progress information where relevant. It also helps to have the previous year's accounts or opening balances, details of share capital and any changes to it, and confirmation of the company's registered details. The cleaner and more complete the records, the more straightforward the preparation of your FRS 105 Micro Entity Accounts tends to be.

The way accounts are filed with Companies House has been evolving, with a move toward digital, software-based filing rather than manual submission routes, and changes to the filing options available for different types of accounts. Because the detail and timing depend on the company and the type of accounts being filed, it is sensible to confirm the current position for your own accounting period rather than relying on how things were done previously. If you would like to talk through what applies to your company and how it affects your FRS 105 Micro Entity Accounts in Penarth, we are happy to go through it with you.