FRS 105 Micro Entity Accounts in Upminster

FRS 105 is the financial reporting standard for UK companies that qualify as micro-entities and choose to apply the micro-entities regime. It is issued by the Financial Reporting Council and sits alongside the Companies Act rules that define which companies can use the regime. Its purpose is to give qualifying companies a streamlined way to prepare their annual financial statements, with simplified measurement and far fewer disclosure requirements than larger reporting frameworks. If a company uses the micro-entities regime, FRS 105 is the standard it applies when drawing up its accounts.

FRS 105 can be used by companies that both qualify for the micro-entities regime and decide to apply it. It is aimed at very small limited companies rather than sole traders or partnerships, and certain companies are excluded regardless of size — for example, where the legal form or the type of activity carried on does not fit the regime's rules. Meeting the size conditions is usually necessary but is not by itself a guarantee of eligibility, so it is worth checking the specific rules and any exclusions that apply to your company before committing to FRS 105.

No. The micro-entities regime is an available accounting regime, not a mandatory one. A company that qualifies can choose to apply it and use FRS 105, or it can prepare its accounts under a different framework instead — for example FRS 102, including the small entities provisions. The choice can depend on what the directors want from the accounts, whether more detail is useful to lenders or other readers, and whether the company's activities suit the simplified treatment. FRS 105 applies when the micro-entities regime is chosen, not simply because a company is small.

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 during the period. The conditions are applied subject to the relevant rules and exclusions, and some companies are ineligible for reasons other than size. Because the criteria interact with the company's structure and activities, the size test alone should not be treated as confirmation that the micro-entities regime is available.

FRS 105 and FRS 102 are different reporting frameworks with different levels of complexity. FRS 105 is the micro-entity standard: measurement is kept deliberately simple and the disclosure requirements are minimal. FRS 102, including its small entities provisions, allows a wider range of accounting policies and treatments and requires considerably more disclosure in the accounts. In practice, FRS 105 produces shorter, more basic financial statements, while FRS 102 gives a fuller picture that some lenders, investors or group companies may prefer. Neither is inherently better — the right one depends on eligibility and on what the company needs from its accounts.

Yes. Where a company prepares micro-entity accounts, those accounts form the basis of its annual accounts filing with Companies House, submitted by the relevant statutory deadline for the accounting period. The filing is a legal obligation on the company and its directors, and the accounts must be prepared in line with the applicable framework and format rather than simply written up in whatever style suits. Filing accounts is separate from filing a Confirmation Statement, which is a different requirement entirely. If you are unsure what applies to your company, we can talk you through the position before anything is submitted.

Yes, they are separate obligations. FRS 105 Micro Entity Accounts are the financial statements prepared under the micro-entities regime and filed with Companies House. A Corporation Tax Return, the CT600, is submitted to HMRC and deals with the company's tax position — profits, allowable deductions, capital allowances and other tax adjustments — under tax rules rather than accounting rules. The two are usually prepared from the same underlying records and the figures will often be similar, but the CT600 may need adjustments that do not appear in the accounts, and it has its own deadlines that are separate from your accounts filing date.

As a starting point, we would expect the company's bookkeeping or accounting records for the period, bank statements and reconciliations, sales and purchase records, payroll information if the company employs staff, details of any loans or finance agreements, stock and asset information, and the previous year's accounts if there are any. It also helps to know about anything unusual during the period, such as a significant one-off transaction, a change in activity, or the acquisition or disposal of an asset. The more complete and up to date the records, the more straightforward the preparation will be.

Companies House has been moving towards software-based and increasingly digital filing of accounts, which affects how micro-entity accounts are submitted as well as what can be included. The overall direction is towards accounts prepared and filed in a structured, tagged format using recognised software, with a narrower set of options for shortened filings. Because the detail and timing of these changes are set out in official guidance rather than fixed by us, we check the latest position when preparing and filing FRS 105 Micro Entity Accounts rather than relying on how filings used to be made.