FRS 105 Micro Entity Accounts in Wantage

FRS 105 is the UK financial reporting standard for micro-entities. It is one of the standards that make up UK GAAP, sitting alongside fuller standards such as FRS 102, and it is designed around far simpler accounting. Under FRS 105, assets are generally measured on a straightforward cost basis, certain more complex accounting options are not available, and the disclosure requirements are significantly reduced. The result is a shorter, more readable set of financial statements suited to a very small company. FRS 105 applies when a company qualifies for the micro-entities regime and chooses to apply it, so it is the regime choice that triggers the standard.

FRS 105 is intended for companies that both qualify for the UK micro-entities regime and decide to apply it. Qualifying is not just about size: there are additional rules and certain categories of company that are excluded from using the regime. It is also a choice rather than a requirement — a qualifying company could instead prepare accounts under a fuller standard such as FRS 102, which offers different accounting options and requires more disclosure. Because eligibility depends on your specific circumstances, it is worth checking your position before assuming the micro-entities regime applies to your company.

For accounting periods beginning on or after 6 April 2025, a company generally needs to meet at least 2 of the following 3 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 the size conditions is not the whole picture, though. The relevant rules and exclusions still apply, and there are situations where a company that looks small on paper cannot use the regime. The tests are also applied to the accounting period concerned, so a business that grows or shrinks may move in or out of the criteria over time.

No. The micro-entities regime is an available accounting regime, not an obligation. A company that qualifies can choose to apply it and prepare FRS 105 accounts, or it can choose a fuller reporting framework instead. The choice often comes down to what the business needs from its accounts — for example, whether anyone relying on them, such as a lender, would prefer more detailed disclosure. The important point is that eligibility opens the door; it does not remove the decision.

Both are UK accounting standards, but they sit at different levels of complexity. FRS 105 is the micro-entity standard and keeps things deliberately simple: measurement is largely based on cost, some accounting choices available under other standards are not permitted, and disclosures are minimal. FRS 102 is a fuller standard, and its small-company section (often referred to as Section 1A) allows more accounting options and requires considerably more disclosure. In short, FRS 105 is lighter and more restrictive, while FRS 102 gives more flexibility at the cost of more work and a longer set of accounts.

Yes. A company that prepares accounts, whether under FRS 105 or another standard, still has to file its annual accounts with Companies House using the appropriate filing route for its circumstances. Micro-entity accounts are usually filed in a simplified form, with a balance sheet and a limited set of notes rather than the full set of statements prepared for the members. Filing the accounts is separate from your tax obligations, and the accounts filed at Companies House are a public record, which is one reason it is worth getting the figures and presentation right before submitting.

Yes, they are two distinct things. FRS 105 accounts are a financial reporting document prepared under the micro-entities regime, and they are filed with Companies House. A Corporation Tax Return (CT600) is a tax filing submitted to HMRC, calculated under tax rules rather than accounting standards, which means adjustments such as disallowable expenses or capital allowances may apply. The accounts are usually the starting point for the tax computation, so the figures should be consistent, but preparing the accounts does not by itself deal with your Corporation Tax. Confirmation Statements and other filing requirements are separate again.

It may be able to, provided it qualifies for the micro-entities regime in that period and is not caught by any of the exclusions. A new company's first accounting period is often longer than twelve months, and the relevant conditions are assessed for that period, so the position should be checked rather than assumed. Practically speaking, a simple newly incorporated company with modest activity is often a natural fit for FRS 105, but the decision should be made with the actual figures and rules in mind. If you are unsure, we can look at your circumstances and explain the options.

We normally start from your accounting records for the period, which might be bookkeeping software, a spreadsheet, or well-organised paperwork. Useful items include bank and credit card statements, sales and purchase invoices, receipts, payroll information, details of any equipment or other assets bought or sold, loan and finance agreements, amounts owed to or by the company, and closing stock or work in progress where relevant. Your previous year's accounts are also helpful for comparatives, and if the current year is your first, we will need details of any share capital and start-up costs. The tidier the records, the more straightforward the preparation tends to be.