Financial compliance in the UK has continued to evolve, especially for micro-entities choosing simplified accounting standards under FRS 105. Understanding the timeline for compliance is essential for staying aligned with HMRC expectations and maintaining proper company records. For small businesses with limited resources, clarity around these deadlines can significantly reduce stress and errors. Many firms now turn to tailored advisory support such as Insights UK FRS 105 services to ensure timelines are met accurately.

Understanding What FRS 105 Covers

FRS 105 is designed specifically for micro-entities. It streamlines statutory reporting while still maintaining consistency and transparency in financial documentation.

A company qualifies as a micro-entity when it meets at least two of the following criteria:

• Turnover not exceeding £632,000

• Balance sheet total not exceeding £316,000

• No more than 10 employees

This standard benefits micro-entities by limiting disclosures and simplifying recognition and measurement rules. However, even though the reporting is simplified, the timing requirements remain strict.

Annual Compliance Timeline Overview

Every financial year follows a structured reporting cycle. The standard obligations for an FRS 105 company typically include:

• Preparing statutory accounts at year-end

• Filing accounts with Companies House

• Submitting a corporation tax return to HMRC

• Maintaining accurate bookkeeping throughout the year

Support providers that specialise in advisory assistance for micro-entities, such as Insights UK FRS 105 services, often create custom calendars to help directors stay compliant.

Key Stages in the FRS 105 Compliance Process

Compliance under FRS 105 generally follows four major stages within each accounting year:

1. Bookkeeping and Record-Keeping (Throughout the Year)

Accurate records should be maintained on an ongoing basis. This reduces the risk of errors and overdue filings. HMRC expects businesses to store invoices, receipts, bank reconciliations, payroll records, and contract information in sequential and verifiable order.

Micro-entities should also follow digital record-keeping best practices. Where software is used, the system must capture all necessary audit trails and calculations without manual reconstruction.

2. Pre-Year-End Review (1–2 Months Before Year-End)

Before the year closes, directors are encouraged to review preliminary figures to highlight adjustments. This helps support timely disclosure and avoids last-minute delays.

Pre-year-end planning may involve:

• Reviewing provisions and accruals

• Assessing fixed assets and depreciation

• Confirming director remuneration and dividends

• Aligning tax planning with year-end entries

3. Account Preparation Post Year-End (Within 9 Months)

Once the financial year wraps up, statutory accounts must be compiled under FRS 105. These accounts will be filed with Companies House within 9 months of the year-end date.

The documents usually include:

• Balance sheet

• Profit and loss account

• Directors’ statement

• Limited disclosures

Even though disclosure is limited, accuracy remains essential. HMRC maintains cross-references between submitted accounts and corporation tax returns.

4. Corporation Tax Filing to HMRC (Within 12 Months)

The final stage involves filing a CT600 corporation tax return, supported by statutory accounts. This must be submitted within 12 months after the year-end, although tax payment deadlines are earlier.

Late filing of corporation tax attracts immediate penalties. FRS 105 does not reduce tax reporting obligations; it only simplifies statutory accounts preparation.

Deadlines and Penalties

Micro-entities must consider two major filing deadlines:

• Companies House filing deadline – 9 months post year-end

• Corporation tax return deadline – 12 months post year-end

Tax payments are typically due 9 months and 1 day after the year-end. Missing any of these obligations can trigger fines, ranging from late filing penalties to daily accrued charges on overdue corporation tax.

Aligning Internal Controls with HMRC Expectations

Simply having an FRS 105 financial statement is not enough. Directors must also demonstrate effective internal controls, even at micro scale. HMRC expects:

• Consistency in recognition of income and expenditure

• Evidence of transactional review

• Accurate matching of timing differences

• Coherent supporting records

Transparency and traceability are central to compliance. Businesses that delay bookkeeping until year-end often face compliance risks due to missing evidence or reconciliations.

Preparing for Year-End in Advance

Preparation should ideally begin months before submission. Directors benefit from planning for disclosures early and mapping documents across bank statements, invoices, and statutory accounts.

Key preparation actions include:

• Reconciling bank records

• Reviewing debtor and creditor balances

• Aligning stock valuations where applicable

• Updating director loan accounts

• Cross-checking VAT or PAYE submissions

An organised preparation phase reduces errors and keeps HMRC satisfied with audit readiness if a review is triggered.

Choosing the Right Compliance Support

Many directors of micro-entities lack the internal accounting capacity to manage compliance alone. Tailored support ensures that statutory accounts align not only with FRS 105 technical requirements but also with HMRC’s strict digital evidence expectations. Professional advisers offering Insights UK FRS 105 services often provide structured compliance calendars, reminder systems, and document health checks.

Communicating with HMRC Effectively

If HMRC raises queries or requests clarification, micro-entities must be ready to supply supporting documentation. These could include:

• Transaction-level audit trails

• Director resolutions

• Interest or loan calculations

• Payroll documentation

Even small inconsistencies can turn into formal compliance assessments, so readiness is essential.

Documentation Retention Timeline

HMRC requires business records to be kept for a minimum of six years. This includes:

• Accounting records

• Receipts and purchase orders

• Bank statements

• Contracts or agreements

• VAT and PAYE filings where applicable

Retention helps demonstrate transparency over time and substantiates earlier filings if audited later.

Why Ongoing Review Is Better Than Last-Minute Filing

Leaving compliance until the final months compresses deadlines and increases the risk of penalties. Early preparation also identifies any classification or disclosure adjustments in good time. By taking a proactive stance, directors can maintain financial control rather than reacting under pressure.

Also Read: The Complete Guide to FRS 105 Adoption for Small UK Businesses