FRS 105 Micro Entity Accounts in Snodland

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It is a simplified framework: the accounts are built around the balance sheet, the accounting options are deliberately limited, and the disclosure requirements are reduced compared with other UK standards. In practice this means shorter, more straightforward financial statements that still give a true and fair view of the company's position for the period. It is a reporting standard for accounts, not a tax return, and using it does not change how your company is taxed.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of the following 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 during the period. Different thresholds applied to earlier periods, so the rules that apply depend on when your accounting period began. Meeting the size conditions is not the whole picture — other eligibility rules and exclusions can apply, and some companies are not able to use the micro-entities regime at all. Because of this, eligibility should be checked against your company's specific circumstances rather than assumed.

No. The micro-entities regime is an available regime, not a mandatory one. A company that qualifies can choose to apply it and prepare FRS 105 accounts, but it may instead use another framework it is eligible for, such as the small companies regime under FRS 102 Section 1A. FRS 105 only applies where the micro-entities regime has actually been chosen. The decision is usually best made by looking at who will use the accounts — for example a bank, an investor or a group parent may want more detail than the micro-entities regime provides — and then applying that framework consistently.

Both sit within UK GAAP, but they serve different purposes. FRS 102 is the broader standard, and Section 1A of it is the small companies regime, which permits more accounting options and requires considerably more disclosure. FRS 105 is narrower and more prescriptive: it removes choices such as revaluation and fair value measurement, simplifies the treatment of items like deferred tax, and asks for far fewer notes. The result under FRS 105 is a leaner set of accounts. If your company qualifies for the micro-entities regime but has commitments or transactions that need fuller explanation, FRS 102 Section 1A may be the better fit.

Yes. A company's annual accounts, including micro-entity accounts prepared under FRS 105, form part of its statutory filing obligations and are delivered to Companies House within the filing deadline that applies to that company. The accounts are also approved by the directors and shared with the company's members. Filing accounts is separate from Corporation Tax: sending accounts to Companies House does not satisfy your HMRC obligations, and filing a tax return does not satisfy your Companies House obligations. Keeping the two strands of work clearly separated helps avoid missed filings.

Yes, they are two different things. FRS 105 Micro Entity Accounts are financial statements prepared for the company and filed at Companies House; a CT600 is the Corporation Tax Return submitted to HMRC to report the company's taxable profits and calculate the tax due. The two are usually based on the same bookkeeping records, but the figures are not identical, because the tax computation applies adjustments that do not appear in the accounts. A company can therefore have straightforward FRS 105 accounts and a more involved tax computation, or the reverse, depending on its circumstances.

We normally need your complete records for the accounting period: bank and credit card statements, sales invoices or till records, purchase invoices and receipts, payroll information, VAT records where relevant, details of assets bought or sold, loan balances and any amounts owed to or by directors. If you have previously filed accounts, the prior year figures are helpful for comparison, along with details of share capital and any changes during the year. For a first set of accounts, we will also need the incorporation details and the date the accounting period started. The clearer and more complete the records, the more efficiently the accounts can be prepared.

Yes, the way small and micro-entity accounts are filed at Companies House is being reformed. The direction of travel includes moving towards software-based filing and requiring more information to be submitted than the current abbreviated balance sheet approach — notably profit and loss information for small and micro-entity companies. Because the detail and timing of these changes can be updated, it is worth confirming the current position when your accounts are due rather than relying on how things were done previously. Preparing your records to a good standard now makes any transition easier.