FRS 105 Micro Entity Accounts in West Bridgford

FRS 105 is the UK financial reporting standard that applies to companies using the micro-entities regime. It sets out how those companies prepare their financial statements — what the accounts must contain, how assets and liabilities are measured, and which notes are required. It sits within UK GAAP alongside standards such as FRS 102, but it is far shorter and simpler, reflecting the smaller size and simpler affairs of the companies it is designed for. It is not a tax computation and it is not a form — it is the accounting framework your financial statements are prepared under.

FRS 105 is intended for companies that qualify for the UK micro-entities regime and then choose to apply it. Two things have to line up: your company must meet the eligibility rules, and the directors must decide to adopt the regime. Qualifying companies are typically very small, but the regime is optional rather than compulsory, and some companies that would otherwise qualify are excluded by the wider rules. Because eligibility depends on your company's own circumstances across the whole period, it is worth checking the position properly rather than assuming FRS 105 is the right fit.

No. The micro-entities regime is an available regime, not a mandatory one. A company that qualifies may still prepare its accounts under a different framework if the directors prefer — for example, where a lender, investor or group parent wants more detail than FRS 105 provides. Choosing the micro-entities regime and therefore FRS 105 usually means simpler accounts with fewer disclosures, but you give up some presentation and measurement options in the process. The decision is one to make with your circumstances in mind, not simply because the thresholds are met.

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. Meeting those conditions is usually the starting point rather than the whole test. Other eligibility rules and exclusions can apply, and a company that has previously been larger, or that sits within a group, may need to look more carefully at whether it qualifies. Falling within the size thresholds does not automatically mean a company is eligible for the micro-entities regime.

FRS 102 is the general financial reporting standard for UK companies that are not micro-entities, and it comes with a fuller set of measurement and disclosure requirements. FRS 105 is a reduced framework for those using the micro-entities regime. In practice, FRS 105 accounts are shorter, the notes are lighter, and certain options available under FRS 102 — such as revaluing assets or using fair value — are generally not available. This can make FRS 105 more straightforward and less costly to prepare, but it also means the figures may look different from those a company would report under FRS 102.

Yes. If your company prepares accounts under FRS 105, those accounts form the basis of what is filed at Companies House for the relevant period, in the format permitted for micro-entity accounts. This is separate from your Corporation Tax position. Filing accounts at Companies House and submitting a Corporation Tax Return (CT600) to HMRC are two distinct obligations with their own requirements, even though they draw on similar underlying records. It is also worth noting that the rules on how accounts are filed at Companies House continue to change, so it is sensible to check the current requirements at the time of filing.

Yes — they are entirely separate documents. FRS 105 accounts are financial statements prepared under the micro-entities accounting framework, and they are submitted to Companies House. A CT600 is the Corporation Tax Return submitted to HMRC, and it is calculated using tax rules rather than accounting standards, so items such as depreciation and disallowable expenses are treated differently. The accounts often provide the starting point for the tax return, but the tax return is not a copy of them. Both generally need to be dealt with for each accounting period, with separate deadlines and processes.

A newly incorporated company may be able to, provided it qualifies for the micro-entities regime and chooses to apply it — but it is not automatic simply because the company is new or small. First-period accounts can raise their own questions, particularly where trading started partway through the period or where the company was dormant for part of it. It is worth reviewing the position before the first set of accounts is prepared so the framework is chosen deliberately and applied consistently from the outset.

In most cases we need your accounting records for the period — bank statements and transaction listings, sales and purchase invoices, payroll or subcontractor information, details of any assets bought or sold, and loan or hire purchase agreements. It is also helpful to know your year-end date, whether the company was dormant or trading throughout, any changes in shareholding or directors, and whether there has been any change in activity. If your bookkeeping is not up to date, say so — we can talk through how to get the records into shape before the accounts are prepared.