FRS 105 Micro Entity Accounts in Thornton-Cleveleys

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It is a simplified framework: accounts are prepared on a historical cost basis, revaluations and fair value accounting are generally not available, and the disclosure requirements are much lighter than those in fuller standards such as FRS 102. In practice, FRS 105 tells you how a qualifying micro-entity's balance sheet, profit and loss account and limited notes should be drawn up so the accounts reflect a simple, cost-based picture of the company.

FRS 105 is 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 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. That is a starting point rather than the whole test, because other eligibility rules and exclusions can apply to particular types of company and to groups. Meeting the size conditions does not automatically mean a company qualifies, and it is worth checking your position before assuming FRS 105 is available to you.

No. The micro-entities regime is an accounting framework that qualifying companies may choose to adopt, not a requirement they must follow. A company that is eligible for the regime could instead prepare its accounts under a fuller standard such as FRS 102, or in some cases under the small companies regime. Once you have adopted the micro-entities regime, though, you should apply it consistently until your circumstances change, and you should think ahead about whether the simpler framework will still suit the company if it grows or takes on finance.

Both are UK financial reporting standards, but they are aimed at different sizes of company. FRS 105 is the most streamlined option: it is based on historical cost, generally does not allow revaluation or fair value measurement, and requires relatively few notes to the accounts. FRS 102 is a fuller framework, offering more accounting policy choices and requiring more extensive disclosures. The right choice is not simply about the least amount of work — if a lender, investor or group parent expects a particular level of disclosure, that can matter more than the simplicity of the standard.

Where FRS 105 accounts are prepared as a company's statutory annual accounts, they are the accounts that get filed at Companies House. Filing is separate from the confirmation statement, which is a different routine filing, and separate again from anything sent to HMRC. Filing deadlines vary depending on the company's accounting reference date and whether it is a first accounting period, so it is worth confirming the date that applies to your company. Companies House filing requirements are also evolving, so it is sensible to check the current position before each set of accounts is finalised.

Yes, they are two different things. FRS 105 accounts are the company's financial statements, prepared under the micro-entities regime and filed at Companies House. A CT600 is the Corporation Tax Return submitted to HMRC to report the company's taxable profit and work out the tax due. The accounts figures usually feed into the return, but tax rules differ from accounting rules — for example, depreciation is generally added back and capital allowances claimed instead — so the taxable profit will often not match the profit shown in the accounts. Both need to be handled, and they need to be consistent with each other.

It may be able to, but it depends on the company's circumstances. A newly incorporated company still has to satisfy the micro-entity size conditions for the period in question and meet the other eligibility rules, so a company that expects significant turnover or a large balance sheet early on may not qualify. New companies also need to think about the longer term: if the business is likely to grow, move to fuller standards or take on external finance, adopting the simplest framework at the outset may or may not be the most practical route. We can look at your expected figures and help you decide.

We usually need enough information to build a reliable set of figures for the period: bank and credit card statements, sales and purchase records, payroll and subcontractor information, details of expenses, asset purchases and disposals, stock or work in progress where relevant, loan and hire purchase agreements, share capital details, directors' loan account movements, and the prior year's accounts if there are any. If you already use bookkeeping software, granting access can speed things up considerably. The aim is to have a complete, consistent record for the accounting period so the accounts can be prepared properly and any related filings dealt with.