FRS 105 Micro Entity Accounts in Theale

FRS 105 is the financial reporting standard that applies in the UK when a qualifying company chooses to use the micro-entities regime. It is a simplified framework: assets and liabilities are generally measured on a straightforward historical basis rather than at fair value, revaluations are not permitted, and the disclosure requirements are much lighter than those found in fuller standards. The outcome is a shorter set of financial statements — typically a balance sheet, a profit and loss account and a small number of notes — prepared for a company that meets the relevant eligibility conditions and has opted into the regime.

FRS 105 is intended for companies that qualify for the UK 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 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. Meeting those size conditions is not the whole picture, because other rules and exclusions can affect eligibility depending on what the company does and how it is structured. Qualifying is a starting point; applying the regime is a separate decision the directors make.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that qualifies may choose to apply it and prepare FRS 105 Micro Entity Accounts, or it may instead prepare its accounts under a fuller framework such as FRS 102. There are legitimate reasons for either route — for example, a lender, investor or group parent may want more detailed financial information than the micro-entities regime provides. The decision rests with the directors, and it is worth reviewing if your company's circumstances or the needs of the people reading the accounts change.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of 3 applicable 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 current thresholds and they replace the older figures many older guides still quote. It is important to remember that satisfying two of the three conditions does not automatically make a company eligible, because separate rules and exclusions apply to certain types of company. If you are unsure where your business stands, the sensible approach is to look at your specific figures and structure rather than assume.

Both are UK financial reporting standards, but they are aimed at different sizes of company. FRS 102 is used by a much wider range of businesses, including small companies that do not qualify for, or choose not to use, the micro-entities regime. It permits or requires things FRS 105 does not — such as certain fair value measurements, deferred tax accounting and revaluation of assets — and it comes with more extensive disclosure requirements. FRS 105 is deliberately narrower, offering a simpler measurement basis and a much shorter set of notes, which is why it is only available to companies that qualify for and choose the micro-entities regime.

Yes. Where a company prepares FRS 105 Micro Entity Accounts, those statutory accounts normally need to be filed with Companies House along with the company's other filing obligations, subject to any exemptions that apply to that company. Filing the accounts is a separate step from preparing them, and it is also separate from the company's Corporation Tax position. Companies House filing is about putting the financial statements on the public register; it is not a review or an endorsement of the figures by Companies House, and it is not the same as telling HMRC what tax is due.

Yes, they are two distinct documents serving two different purposes. FRS 105 Micro Entity Accounts are the statutory financial statements prepared under the micro-entities framework for the company's members and for filing at Companies House. A CT600 is a Corporation Tax Return submitted to HMRC to report the company's taxable profits and work out the Corporation Tax due. The figures should be consistent with one another and are usually derived from the same accounting records, but the accounts do not replace the CT600, and the CT600 does not replace the accounts. Both need to be dealt with separately, and the tax computation often involves adjustments that do not appear in the accounts themselves.

To prepare FRS 105 Micro Entity Accounts we generally need a clear picture of the company's trading for the period and its position at the period end. That usually means bank statements and reconciliations, sales and purchase records, payroll information, details of any assets bought or sold, loan and director's account balances, stock or work in progress figures where relevant, and the previous year's accounts for comparison. If you already keep bookkeeping software, we can often work from the records it produces. The more complete and up to date the information is, the smoother the process tends to be, and we will tell you exactly what is missing if something is needed.