FRS 105 Micro Entity Accounts in Sutton Coldfield

FRS 105 is the UK financial reporting standard for companies that qualify for, and choose to apply, the micro-entities regime. It is the simplest available basis for preparing statutory accounts: the financial statements are prepared on a historical cost basis, revaluations and fair value accounting are generally not permitted, and the required disclosures are kept to a minimum. In practice, FRS 105 Micro Entity Accounts are usually brief, consisting of a balance sheet, a profit and loss account and a small number of notes.

FRS 105 is intended for companies that fall within the UK micro-entities regime and decide to use 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. Meeting those size conditions does not automatically guarantee eligibility, because other rules and exclusions can apply depending on the type of company and what it does. If you are unsure where your company stands, it is worth checking before the accounts are prepared.

No. Qualifying for the micro-entities regime does not force a company to use it. The regime is a choice, and FRS 105 applies when that choice is made. A company that qualifies may instead prepare its accounts under a fuller framework, such as FRS 102 Section 1A, which involves more disclosure but can present a more detailed picture. Some directors prefer FRS 105 for its simplicity, while others prefer a fuller framework because of lenders, investors or group requirements. The right answer depends on your circumstances.

Both are UK financial reporting standards, but they sit at different levels of complexity. FRS 105 is restricted to qualifying micro-entities and is built on a historical cost basis with minimal disclosures. FRS 102 is the standard for larger small companies and other entities, and it allows or requires more accounting treatments and significantly more disclosure — for example, in areas such as financial instruments, provisions and deferred tax. FRS 102 Section 1A is the reduced-disclosure version for small companies that do not qualify as micro-entities. The framework you use affects how the figures are measured and how much has to be explained in the notes.

Yes. FRS 105 Micro Entity Accounts are statutory accounts, so they still need to be filed at Companies House for the relevant accounting period, using the filing option that applies to micro-entity accounts. The fact that the accounts are short does not remove the filing obligation. Alongside the accounts, most companies also have a separate Confirmation Statement filing, and any Corporation Tax obligations are handled separately with HMRC. We can prepare the accounts and deal with the Companies House filing as part of the same piece of work.

Yes, they are separate. The FRS 105 Micro Entity Accounts are the financial statements prepared under the micro-entities regime and filed at Companies House. A CT600 is the Corporation Tax Return submitted to HMRC, and it is calculated using tax rules rather than the accounting framework alone — which means adjustments such as disallowable expenses and capital allowances usually need to be considered. Both are prepared from the same underlying records, but they serve different purposes and go to different bodies.

We normally work from your bookkeeping records or a trial balance covering the accounting period, together with bank statements, sales and purchase records, payroll or contractor information, details of any loans or finance agreements, and records of asset purchases and disposals. It also helps to know whether you have filed accounts before, what framework was used, and whether there have been any significant changes during the period. If your records are incomplete, we can talk through what is needed to bring them up to a point where the accounts can be prepared properly.

Filing at Companies House has been moving steadily towards digital, software-based submission, and the position can differ depending on the period and the filing route available at the time. Rather than rely on general assumptions, it is worth confirming how your particular accounts need to be submitted for your year end. When we prepare your FRS 105 Micro Entity Accounts, we will check the filing requirements that apply to your company and explain what is needed from you, so there are no surprises as the deadline approaches.

A newly incorporated company can potentially use FRS 105 for its first set of accounts, provided it qualifies for the micro-entities regime at that point and chooses to apply it. First-year figures can be straightforward, but the tests are applied to the company's circumstances, and other eligibility rules may be relevant — for example where the company is part of a group or operates in a regulated sector. If you have just started trading in Sutton Coldfield, it is a good idea to confirm the position early so your bookkeeping is set up in a way that suits a micro-entity filing.