FRS 105 Micro Entity Accounts in Penrith

FRS 105 is the UK financial reporting standard that applies to the micro-entities regime. It sets out how a qualifying micro-entity should prepare its annual financial statements when it chooses to use that regime, covering matters such as how assets and liabilities are measured and what disclosures are needed. It is a simplified framework compared with the standards used by larger companies, but it still requires the accounts to reflect the company's transactions and financial position accurately and consistently.

FRS 105 is available to companies that qualify for the micro-entities regime and that choose to apply it. Qualifying is not simply a case of being small: the company must meet the applicable size conditions and must not fall within any of the exclusions that apply to the regime. Some types of entity are outside the regime altogether, and certain companies with particular ownership or activity profiles may not be eligible even if they look small on the numbers. Because eligibility depends on your specific circumstances, it is worth having your position reviewed rather than assuming you qualify.

No. The micro-entities regime is an available accounting regime rather than a mandatory one. A company that qualifies may choose to apply it and therefore prepare FRS 105 Micro Entity Accounts, but it is equally entitled to prepare its accounts under a different framework, such as FRS 102, if that better suits its needs. In practice the choice often comes down to the level of disclosure you want or need, the expectations of lenders, investors or other users of the accounts, and whether any group or contractual requirements apply.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of 3 applicable size conditions, subject to the relevant rules and exclusions. Those 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 during the period. Meeting the size conditions is not the whole story — other eligibility rules and exclusions can also apply, so the criteria should be considered alongside your company's specific circumstances before you conclude that the regime is available.

FRS 105 is the framework for the micro-entities regime, while FRS 102 is the wider UK and Republic of Ireland standard used by many small and medium-sized companies that do not apply the micro-entities regime. FRS 105 is the more streamlined of the two: measurement is generally simpler and the disclosure requirements are lighter. FRS 102 permits more accounting policy choices, such as revaluation of certain assets, and requires fuller disclosures. Choosing between them is therefore a question of eligibility, simplicity and what the users of your accounts need to see.

Where a company is required to deliver accounts to Companies House, the FRS 105 Micro Entity Accounts form the basis of that filing, presented in the format required for a micro-entity. The accounts and the filing are related but not identical concepts: the financial statements are prepared first, and the delivery requirements then determine what is submitted and in what form. Filing obligations vary with company type and circumstances, so it is sensible to confirm what applies to your company rather than relying on general assumptions.

Yes — they are two different things. FRS 105 Micro Entity Accounts are the company's financial statements, prepared under the micro-entities regime. A CT600 is a Company Tax Return submitted to HMRC, dealing with the company's Corporation Tax position. The accounts inform the tax computation, but the CT600 is a separate filing made to a different authority with its own requirements and its own basis of calculation. Filing accounts does not, on its own, satisfy the Corporation Tax obligation.

We normally need a complete picture of the company's transactions for the period: sales and purchase records, bank and cash statements, details of expenses, information on fixed assets and any related depreciation, loans and other liabilities, stock or work in progress where relevant, and details of share capital and any dividends paid. It also helps to know the company's ownership structure, whether it has any group relationships, and whether anything unusual happened during the year. If you already have records for a prior period, those are useful too, as they allow the figures to be prepared consistently.

The framework for company accounts and filing has been under review, and changes affecting how small and micro-entity accounts are prepared and delivered have been taking shape in recent years. The practical effect on any individual company depends on its accounting period and on the rules in force at the relevant time, and some changes apply from specified dates rather than immediately. Because the detail matters, we recommend checking the current position for your period rather than relying on information written before the changes took effect.