FRS 105 Micro Entity Accounts in Saltash

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It sets out how a qualifying micro-entity measures and presents its financial statements, and it is deliberately the least complex of the UK accounting frameworks. Compared with standards used by larger companies, FRS 105 restricts some accounting choices — for example, it does not permit fair value or revaluation accounting — and requires a much shorter set of notes. The result is a concise balance sheet and limited disclosure that still reflects the company's financial position.

FRS 105 is for companies that qualify for the 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 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. Other eligibility rules and exclusions can apply, so meeting the size conditions does not automatically mean the regime is available. Certain companies are excluded from the micro-entities regime regardless of their size, and the position can change if the company's figures move above the thresholds for consecutive periods.

No. The micro-entities regime is an available accounting regime for qualifying companies rather than a mandatory one. A company that qualifies can choose to apply it and prepare FRS 105 accounts, or it can choose a different framework, such as FRS 102. In practice, the choice often comes down to what the directors and any other users of the accounts need, and whether the simplifications of FRS 105 are a good fit. Once a regime is adopted, it should generally be applied consistently, so it is worth considering the longer-term picture rather than looking at a single year in isolation.

Both are UK financial reporting standards, but they are aimed at different sizes of company. FRS 105 is restricted to companies applying the micro-entities regime and offers the greatest simplification: fewer accounting policy options, no fair value or revaluation accounting, and a much reduced set of disclosures. FRS 102 is the broader standard used by small and larger entities, with more measurement choices and considerably more disclosure requirements — for example, small companies using FRS 102 Section 1A still provide more notes than a micro-entity would. If a company stops qualifying for the micro-entities regime, or chooses not to use it, its accounts would normally move to a framework such as FRS 102.

Yes. FRS 105 accounts are statutory accounts, so they need to be filed at Companies House for the relevant accounting period, using the filing options available to micro-entity companies. Preparing the accounts and filing them are two connected but distinct steps, and it helps to be clear about what will be submitted on the public record. Filing the accounts at Companies House is also separate from any tax filing. If you would like help with the filing as well as the preparation, that can be arranged as part of the work.

Yes, they are separate requirements. The FRS 105 Micro Entity Accounts are the statutory financial statements prepared under the micro-entities regime and filed at Companies House. A CT600 is a Corporation Tax Return submitted to HMRC, which reports the company's taxable profits and is based on the company's results as adjusted for tax purposes. HMRC and Companies House are different authorities with different filing obligations, so preparing and filing your accounts does not, by itself, deal with your Corporation Tax Return — both need to be handled for the relevant period.

A newly incorporated company can potentially use FRS 105 for its first accounting period if it qualifies for the micro-entities regime and the directors choose to apply it. In the first period there is no prior-year comparison, so eligibility is assessed against the size conditions for that period, and the usual rules and exclusions still apply. Because a new company's trading pattern may be uneven, it is worth reviewing the position before the accounts are prepared rather than assuming the regime will apply in later years as well.

Typically we need your company's accounting records for the period: sales and purchase information, bank and cash records, details of any assets bought or sold, loan and finance agreements, payroll and director remuneration details, and stock or work-in-progress figures where relevant. Prior-year accounts and the company's registration details are also helpful for consistency. If your records are incomplete, we can talk through what is missing and how best to pull the information together before the accounts are prepared under the FRS 105 framework.

Companies House has been introducing changes to accounts filing, including a move towards filing accounts using software and changes to what small and micro-entity companies are expected to include in their filings — such as a directors' report and profit and loss account being required alongside the balance sheet in future. The detail and timing of these changes depend on government announcements and transitional arrangements, so the sensible approach is to check the latest Companies House guidance before each filing and to keep your records in a format that can accommodate the new requirements.