FRS 105 Micro Entity Accounts in St Austell

FRS 105 is the UK financial reporting standard for the micro-entities regime. It sets out how qualifying micro-entity companies prepare their statutory financial statements, using a simplified format and reduced disclosure requirements compared with larger reporting frameworks. If a company qualifies for the micro-entities regime and chooses to apply it, FRS 105 is the standard that governs how its annual accounts are put together.

FRS 105 is intended for companies that both qualify for the UK micro-entities regime and decide to apply it. Qualification is based on size conditions and is also subject to other eligibility rules and exclusions, so meeting the size tests on their own does not automatically mean a company can — or must — use FRS 105. Companies with more complex structures or particular circumstances may fall outside the regime. It is worth checking your position each year, because eligibility can change as a business grows or its activities change.

No. The micro-entities regime is an available accounting framework for qualifying companies rather than a mandatory one, and FRS 105 applies when that regime is chosen. A company that qualifies may instead prepare its accounts under a different framework, depending on its circumstances and what its directors consider appropriate. In practice, many small companies find the simplified approach appealing, but the decision should be made with a proper understanding of the company's situation.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of the following 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 during the period. These are the size tests, but they sit alongside other rules and exclusions that can affect whether a company is eligible for the micro-entities regime. Because the conditions are assessed on the applicable period and can vary between companies, it is sensible to confirm your specific position rather than assuming.

Both are UK financial reporting standards, but they are aimed at different sizes of entity. FRS 105 is the micro-entities standard, offering a much shorter and simpler set of financial statements with fewer disclosures. FRS 102 is used by a broader range of companies and includes more detailed recognition, measurement and disclosure requirements, with a separate reduced-disclosure option for small entities within that framework. In simple terms, FRS 105 is the lightest-touch option and is only available to companies that qualify for the micro-entities regime and choose to use it.

Yes — preparing accounts under FRS 105 affects how the financial statements are prepared and what they contain, but it does not remove the requirement to file the company's annual accounts at Companies House. Micro-entity accounts are filed in line with the applicable filing requirements, and the format and content of what is filed should be consistent with the accounts prepared. Separate from this, your Corporation Tax obligations are dealt with through a Company Tax Return (CT600) submitted to HMRC, which is a distinct filing.

Yes, they are two different things. FRS 105 accounts are the company's statutory financial statements, prepared under the micro-entities regime and filed at Companies House as part of the annual accounts process. A CT600 is a Corporation Tax Return submitted to HMRC to report the company's taxable profits and work out what tax is due. The financial information behind both should be consistent, but the documents serve different purposes, go to different organisations and follow their own rules. Good record-keeping makes it far easier to keep the two aligned.

A newly incorporated company can potentially use FRS 105, but eligibility is not based on being new — it depends on whether the company qualifies for the micro-entities regime and chooses to apply it. In the first period of trading, the size conditions are assessed using the applicable rules for that period, which can differ from the way they are assessed in later years. It is also possible for a company's eligibility to change over time. If you have recently set up a company in St Austell, it is worth reviewing your position before deciding which framework to apply.

In most cases, we would look for a complete set of financial records for the period — bank statements and reconciliations, sales and purchase records, expense details, payroll information, any asset purchases or disposals, and details of loans or other balances. Notes on anything unusual during the year are also helpful, as is a copy of the previous year's accounts if there is one. If your records are not fully up to date, that is not a barrier to getting started; it simply becomes part of the conversation about what needs to be tidied up before the accounts can be prepared accurately.