SimpleReturns

FRS 105 vs FRS 102: which one is my company?

Updated 29 June 2026
The short answer

FRS 105 and FRS 102 are two sets of rules for writing up your company accounts, and which one you use comes down to your company's size. The smallest companies (called micro-entities) use FRS 105, which is the simpler set. A bit bigger, but still small? You're on FRS 102, which asks for more detail. Most one-person and very small companies are FRS 105.

What decides which one I use?

Mostly your size. Not what you do, not how long you've traded. The government sorts companies into bands by how big they are, and your band sets the simplest set of rules you're allowed to use. You can always choose a fuller set if you want to (some owners do when a bank or investor asks for more detail), but you never have to, and most small companies just use the simplest one they qualify for.

There are two checks that matter to most small companies:

  • The micro-entity band, which uses FRS 105. This is the smallest band, and it's the simpler set of rules.
  • The small-company band, which uses FRS 102 (the part of it built for small companies). This is the next size up, for companies too big to be micro but still small. It asks for more detail in the accounts.

So the real question is: are you small enough to be a micro-entity? If yes, you're FRS 105. If you're past that line but still inside the small-company line, you're FRS 102.

Am I FRS 105 or FRS 102?

Your company is measured on three things: how much money comes in (turnover), what it's worth on paper (its balance-sheet total), and how many people it employs. You compare those against the limits for each band, and you only need to be under two of the three to count.

The micro-entity line (FRS 105) is low: it's for the smallest companies. We keep the exact micro numbers in one place so they're never out of date. See Am I a micro-entity? for the precise turnover, balance-sheet and employee limits.

The small-company line (FRS 102) is much higher. For a company year that starts on or after 6 April 2025, you're small (and on FRS 102) if you meet at least two of these three:

  • Turnover of £15 million a year or less.
  • A balance-sheet total of £7.5 million or less.
  • 50 employees or fewer.

If you sail past the micro line but stay under those small-company limits, FRS 102 is your set. Go over the small-company limits too and you're into bigger rules that a company like yours almost never hits.

For example

One date thing worth knowing: those higher limits apply to a company year that starts on or after 6 April 2025. A year that started before then uses lower limits. These limits hadn't changed since 2013, and in 2025 they jumped by roughly half again, the first move in over a decade. You don't have to track this, we read the dates on your year and use the right set for you.

What's actually different between them?

FRS 105 is the lighter set. It keeps things simple on purpose, because it's built for the smallest companies:

  • It values things at what you paid for them, and leaves them there. No revaluing, no guessing what they're worth today.
  • It skips a fiddly tax adjustment called deferred tax entirely, so there's one less thing to work out.
  • The accounts you file are short, with only a handful of notes.

FRS 102 asks for more. Same idea of true and fair accounts, but with more detail and more notes attached, and it does deal with that deferred-tax adjustment FRS 105 ignores. For a bigger company that extra detail is useful. For the smallest companies it'd just be extra work, which is the whole reason FRS 105 exists.

For most of our customers, the short answer is FRS 105, the simpler one.

A worked example

Say your company, a small design studio, has:

  • Turnover of £180,000 a year.
  • A balance-sheet total of £40,000.
  • 2 employees (you and one other).

Those numbers are tiny, well under the micro-entity line, so your company is a micro-entity and files under FRS 105. Short accounts, no deferred tax, done.

For example

Now picture the same business five years on: turnover £2.4 million, balance sheet £900,000, 14 employees. That's sailed past the micro line on all three counts, but it's nowhere near the small-company limits of £15 million, £7.5 million and 50 people. So now it's a small company on FRS 102, with fuller accounts. The business didn't change what it does, it just grew into the next band.

What if I'm right on the line, or I've just grown?

The size bands have a built-in cushion so you don't flip back and forth every year over a few pounds. As a rule you have to be over (or under) a line for two years running before your band actually changes. If you've had one unusual year, you probably stay where you are. This is exactly the kind of edge we check from your real figures, so you don't have to.

How SimpleReturns handles it

Connect your bank or upload a statement, and we work out your size from your real numbers, decide whether you're a micro-entity, and file the right FRS 105 micro-entity accounts to Companies House alongside your Corporation Tax return to HMRC. You don't pick a standard or learn what either code means, for £99, once, no subscription.

Common questions

Is FRS 105 or FRS 102 better?

Neither is better, they're for different sizes. FRS 105 is the simpler set for the smallest companies (micro-entities); FRS 102 is for small companies a size up and asks for more detail. Your size sets the simplest set you're allowed to use, and you can pick the fuller one if you want to, though most companies your size don't need to.

How do I know if I am a micro-entity?

You compare your turnover, balance-sheet total and employee count against the micro limits and check whether you are under at least two of the three. The exact numbers are in our guide Am I a micro-entity?

What's the main difference in plain terms?

FRS 105 keeps things at what you paid, skips the deferred-tax adjustment, and files short accounts. FRS 102 carries more detail and more notes, and does handle deferred tax.

The size limits changed, do I need to do anything?

No. The small-company limits went up on 6 April 2025 (to £15 million turnover, £7.5 million balance sheet, 50 people), and they apply to company years starting on or after that date. We read your year dates and apply the right limits for you.

My company grew past the micro line, am I FRS 102 now?

Usually once you have been over the micro line for two years in a row, yes. One odd year on its own normally does not move you. We check this from your actual figures.

Ready to do it the easy way?

You don't need to know what FRS 105 or FRS 102 means to file. We work out your size, file the right micro-entity accounts and your tax return together, and show you every figure first, for £99, once, no subscription.

Start your return →

If your company is bigger and lands on FRS 102, or you've got a more complex setup, an accountant may be the better fit, and that's an honest call to make.

General guidance, not advice. This guide explains how the rules generally work for small UK limited companies. It isn't tax advice for your specific situation, if you're unsure, check with us or an accountant.