FRS 105 Micro Entity Accounts in South East London

FRS 105 is the UK financial reporting standard for micro-entities. It sits within the UK's micro-entities regime and sets out a simplified framework for preparing financial statements: figures are generally prepared on a historic cost basis, revaluation and fair value accounting are not available, and the disclosure requirements are considerably shorter than under other standards. In practice it produces a concise balance sheet, profit and loss account and small set of notes for companies that qualify and choose to use it.

FRS 105 is intended for companies that qualify for the micro-entities regime and then choose to apply it. Qualifying is not automatic — a company needs to fall within the applicable size criteria and must not be excluded by the other eligibility rules that apply, which can depend on the type of company and its activities. Meeting the size thresholds alone does not guarantee eligibility, so it is worth checking your company's position before deciding to prepare accounts on this basis.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that qualifies can choose whether to apply it, and where that choice is made, FRS 105 is the standard used to prepare the financial statements. Many qualifying companies instead prepare accounts under FRS 102 Section 1A, which offers more disclosure and some additional measurement options. The right choice depends on your circumstances and who uses the accounts.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of the 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. These are the headline size tests, and other eligibility rules and exclusions can still apply on top of them, so satisfying the thresholds does not by itself confirm that a company qualifies.

Both are UK financial reporting standards, but they are aimed at different sizes of company and offer different levels of detail. FRS 105 is the micro-entities standard: simpler, historic cost based, with limited disclosures. FRS 102 (including Section 1A for small entities) allows more measurement options such as fair value in certain cases and requires fuller notes, which can be useful where lenders, investors or group companies want more information. Choosing between them is a reporting decision, not a tax one.

A company's financial statements are filed at Companies House as part of its annual accounts filing, and micro-entity accounts prepared under FRS 105 are filed in the format the micro-entities regime permits. That filing is separate from the company's Corporation Tax Return (CT600), which goes to HMRC, and from its Confirmation Statement, which confirms the register information Companies House holds. They are three distinct obligations with different purposes and different submission routes.

Yes. FRS 105 Micro Entity Accounts deal with how the financial statements are prepared and reported, while the CT600 is the company's Corporation Tax Return submitted to HMRC. The accounts are usually the starting point for the tax computation, but tax rules — for example on capital allowances, disallowable expenses or losses — mean the taxable figures can differ from the accounting figures. It is common to prepare both together, but they remain separate deliverables.

Typically we need your bookkeeping or accounting records for the period, bank and credit card statements, sales and purchase invoices, details of amounts owed to and by the company, payroll and employee information, records of assets bought or sold, loan and director's loan movements, stock or work in progress figures where relevant, and the previous year's accounts. If records are incomplete or held in different places, we can talk through what is missing and how best to pull it together before the accounts are prepared.

A newly incorporated company may be able to prepare its first set of accounts under FRS 105 if it qualifies for the micro-entities regime and chooses to apply it. Eligibility still depends on the applicable size criteria and the other rules that apply, and a first period can cover more than twelve months, so it is sensible to look at the position before the year end rather than afterwards. We can review your circumstances and discuss whether FRS 105 is appropriate for your first accounts.

Company filing requirements and the way accounts are submitted are changing, with a move towards filing accounts and other information digitally through compatible software rather than by alternative routes, alongside changes to what can be filed. Because the detail and timing of these changes matter, it is worth reviewing your company's filing approach before your next year end. We can talk through how current and forthcoming requirements affect how your FRS 105 Micro Entity Accounts are prepared and submitted.