FRS 105 Micro Entity Accounts in Taynuilt

FRS 105 is the UK financial reporting standard for micro-entities. It provides the rules a qualifying company follows when it prepares its annual accounts under the micro-entities regime, covering how items are recognised and measured and which disclosures are required. It is deliberately simplified compared with fuller standards, which is why micro-entity accounts tend to be shorter and more straightforward to read.

FRS 105 is intended for companies that qualify for the micro-entities regime and then 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 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 conditions is not the whole story — other eligibility rules and exclusions can apply, and certain companies are not able to use the regime regardless of size. Eligibility should always be checked against your specific circumstances rather than assumed.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that qualifies can choose to apply it, and FRS 105 applies when that choice is made. A qualifying company may instead decide to prepare its accounts under a different framework, such as FRS 102, which involves more detailed recognition, measurement and disclosure requirements. The decision is usually about the level of detail the directors want in the accounts and what the company needs them for.

FRS 105 is the streamlined standard for qualifying micro-entities, while FRS 102 is a fuller framework used by a much wider range of companies. Under FRS 105 the accounts are prepared on a simpler, historical cost basis, certain treatments such as revaluation are not permitted, and the disclosure requirements are considerably reduced. FRS 102 permits or requires more complex accounting in a number of areas and comes with a longer set of notes. Neither is inherently better — the right answer depends on whether your company qualifies for the micro-entities regime and what you want from your financial statements.

A limited company is required to file annual accounts with Companies House, and where the micro-entities regime has been used, micro-entity accounts can be filed. The accounts filed are drawn from the financial statements prepared for the company and its members, although the version filed publicly may be shorter than the full set. Filing your annual accounts is separate from filing a Confirmation Statement and separate again from your Corporation Tax Return, so it is worth keeping track of each obligation individually.

Yes — they are two distinct filings for two different audiences. Your FRS 105 Micro Entity Accounts are the financial statements prepared under the micro-entities regime and, for a limited company, the annual accounts are filed at Companies House. A CT600 is a Corporation Tax Return submitted to HMRC to report the company's taxable profits and work out the tax due. Both are usually built from the same accounting records, but the figures can differ because tax rules and accounting rules do not always line up.

A newly incorporated company can use the micro-entities regime if it qualifies and the directors choose to apply it — being new does not automatically rule it out. First accounting periods can be slightly different to assess because the period may be longer or shorter than twelve months, and the size conditions need to be looked at in the way the rules require. The safest approach is to review the position at the end of the period rather than assume the regime applies from day one.

We normally need a complete picture of the company's trading and financial position for the period. That typically includes bank and credit card statements, sales and purchase records, payroll information, details of any loans, hire purchase or lease agreements, VAT records if registered, a list of assets owned and any amounts owed to or by the company. If accounts have been prepared before, the previous year's figures are helpful for comparison, and any significant one-off transactions during the period are worth flagging early. Well-organised records make the year-end process smoother and reduce the number of queries that come back to you.

The way small and micro-entity accounts are filed at Companies House has been changing, with a shift towards digital submission through compatible software rather than paper or simple spreadsheet uploads, along with changes to what can be filed for smaller companies. Because the detail and the timing of these changes matter, and they can affect how your accounts need to be prepared and submitted, it is worth checking the current position for your filing date and planning ahead rather than leaving it to the last minute. We can talk you through what the requirements mean for your company's next set of FRS 105 Micro Entity Accounts.