FRS 105 Micro Entity Accounts in Winsford

FRS 105 is the UK financial reporting standard that applies when a company qualifies for the micro-entities regime and chooses to apply it. It sets out the recognition, measurement and disclosure rules for those financial statements: simplified measurement, no fair value accounting, no revaluation of assets, no deferred tax and a much shorter set of disclosure notes than FRS 102 requires. FRS 105 governs how the accounts are put together — it is not a tax filing and it does not determine how much Corporation Tax a company pays.

FRS 105 can be used by companies that qualify for the micro-entities regime and decide 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. Meeting those size tests is not the whole story, however — the regulations also contain exclusions and other eligibility rules, so a company can fall outside the regime despite being small, and some entities are excluded regardless of size. It is always worth checking your specific position before the accounts are prepared.

No. The micro-entities regime is an available accounting regime rather than a requirement. A company that qualifies can choose to apply the regime, in which case FRS 105 applies, or it can prepare its accounts under FRS 102 where it is eligible to do so — for example using the small companies provisions. The framework adopted is normally applied consistently from year to year, so a change of framework is something to plan rather than switch casually, and the choice can affect what is disclosed and how figures are measured.

Both are UK financial reporting standards, but they are pitched at different sizes of company. FRS 105 is built on FRS 102 with a set of simplifications: fewer disclosure notes, simpler measurement, no fair value accounting, no revaluations, no deferred tax and no hedge accounting. FRS 102 is more comprehensive and gives more options, including Section 1A for small companies, and it is the framework used by companies that do not qualify for, or do not choose, the micro-entities regime. In practice, FRS 105 tends to produce shorter, more straightforward statements, while FRS 102 provides more detail and flexibility.

Micro-entity accounts sit within the annual accounts that companies are required to prepare and file at Companies House, subject to the applicable filing rules and any exemptions, so the framework used for preparing the accounts and the obligation to file them are two related but separate points. If you prepare FRS 105 Micro Entity Accounts in Winsford, we can handle the Companies House filing alongside your other company obligations. It is worth noting that Companies House has been introducing changes to accounts filing, so the practical requirements should be confirmed for your specific year end.

Yes, these are two distinct filings. The financial statements prepared under FRS 105 — the balance sheet, profit and loss account and notes — are the company's accounts, and a copy is filed at Companies House. The Corporation Tax Return, form CT600, is submitted separately to HMRC to report the company's taxable profits and calculate the tax due. The two are usually built from the same underlying records in the accounts and the tax computation, but they follow different rules and have their own submission arrangements. Filing the accounts does not settle your Corporation Tax position.

We normally start with your accounting records for the period: bank and credit card statements and reconciliations, sales records and invoices, purchase invoices and receipts, payroll information, details of fixed assets bought or sold, stock or work in progress figures, and any loans, hire purchase or lease agreements. It also helps to have your VAT returns, details of any dividends or share changes, and the previous year's accounts or filing confirmation so we can check comparability. If your records are incomplete or kept in a mix of formats, tell us at the outset — we can advise on what needs tightening up before the accounts are finalised.

Companies House has been phasing in changes to how company accounts are filed, including a move towards filing through software rather than paper or PDF versions, and the withdrawal of some of the simpler filing options companies previously relied on. Because these changes apply from particular accounting periods and are supported by transitional arrangements, the practical effect depends on your company's year end and filing history. Rather than assume how the rules apply to you, it is best to check the current position before each set of accounts is completed — we can confirm how the latest requirements affect your FRS 105 Micro Entity Accounts when you get in touch.