As a limited company director, you must file an annual set of accounts with HMRC and Companies House. Our latest article provides information about what needs to be included in limited company annual accounts and when they are due.

What are annual accounts?

All limited companies registered in the UK have a legal obligation to prepare annual accounts every year. Annual accounts are also often referred to as statutory accounts, company accounts, or financial accounts. They are comprised of financial statements and records, including the company’s financial position at the end of the financial year and profits and losses. A limited company’s annual accounts ensure the company pays the right amount of tax and provide shareholders with accurate financial information about the company.

Every limited company has its own financial year, which shouldn’t be confused with the tax year (6^th April—5^th April). Your company’s financial year starts on the limited company’s ‘birthday’ (i.e., the date the company started trading specified by the date you registered with Companies House). Your limited company’s year-end falls on the day before that date in the following calendar year.

Depending on the complexity of your company’s financial activity and size, you may decide to complete all of the accounting and bookkeeping requirements yourself. However, most limited company directors hire accountants to complete and file these documents on their behalf.

What is the deadline for filing your annual accounts?

At the end of your limited company’s financial year, you are required to prepare a set of annual accounts which include:

• Full (‘statutory’) annual accounts
• A Company Tax Return

What is the deadline for filing your limited company annual accounts:

Action required	Deadline
File first accounts with Companies House	21 months after the date you registered with Companies House
File annual accounts with Companies House	9 months after your company’s financial year ends
Pay Corporation Tax or tell HMRC that your limited company does not owe any	9 months and one day after your ‘accounting period’ for Corporation Tax ends
File a Company Tax Return	12 months after your accounting period for Corporation Tax ends

 

Your company’s accounting period for Corporation Tax is the time covered by your Company Tax Return. It’s normally the same 12 months as your limited company’s financial year covered by your annual accounts.

How to prepare annual accounts?

Annual accounts

As a limited company director, you prepare your company’s annual accounts from its financial records at the end of the financial year.

Annual accounts must include:

• A balance sheet which shows the value of everything the company owns, owes and is owed on the last day of the financial year
• A profit and loss account showing the company’s running costs, sales, and the profit or loss it has made over the financial year
• A director’s report (unless you’re a micro-entity)
• Notes about the accounts

Copies of the annual accounts must be sent to:

• Companies House
• All shareholders
• HMRC (as part of your Company Tax Return)
• People who can go to the company’s general meetings

Company Tax Return

You are required to file a Company Tax Return (CT600) if you get a ‘notice to deliver a Company Tax Return’ from HMRC. Even if you have no Corporation Tax to pay or you make a loss, you must still send a return.

When you file your Company Tax Return, you work out your:

• Profit or loss for Corporation Tax – please note this is different to the profit or loss shown in your limited company annual accounts
• Corporation Tax bill

You can complete and file your annual accounts and tax return yourself, or, if you’d prefer, you can appoint a dedicated contractor accountant to do so for you. If you are looking for a dedicated contractor accountant, please call us on 01707 871622.

What are the penalties for filing your annual accounts late?

There are penalties for filing your annual accounts late to HMRC and Companies House. The penalties for filing your annual accounts late to Companies House are:

Time after your company deadline	Penalty
Up to 1 month	£150
1 to 3 months	£375
3 to 6 months	£750
More than 6 months	£1,500

 

The penalties for filing your annual accounts late to HMRC are:

Time after your company deadline	Penalty
1 day	£100
3 months	Another £100
6 months	10% of your unpaid Corporation Tax
12 months	Another 10% of any unpaid Corporation Tax

 

Please note that penalties could be doubled if accounts are filed late in two successive financial years.

Please visit the government’s website for more information about late filing penalties, appealing penalties, and paying penalties.

If you are worried about filing your annual accounts on time and want to avoid a late filing penalty, you can easily avoid this by appointing a contractor accountant to file your annual accounts. If you are interested in appointing a contractor accountant, please call our experts on 01707 871622.

What are the exceptions for micro entities, small and dormant companies?

Depending on whether your company is dormant or qualifies as a small company or ‘micro-entity’, you may be able to send abridged accounts to Companies House, which is much simpler.

Dormant companies

If your company had no ‘significant’ transactions in the financial year that would normally be reported, your company may be considered dormant. Dormant companies that qualify as ‘small’ do not need to be audited. To check if your company is also dormant for Corporation Tax, please visit the government’s website.

Small companies

Your business may be considered a small company if any two of the following statements apply:

• 50 employees or less
• A turnover of £10.2 million or less
• £5.1 million or less on its balance sheet

If your company is a small company, you can send an abridged account to Companies House, choose whether to send a copy of the director’s report and profit and loss account to Companies House or use the exemption so your company’s accounts do not need to be audited.

Abridged accounts

You can only send abridged accounts if all company members agree to them. Abridged accounts must contain a simpler balance sheet and any notes. You can also choose to include a simpler profit and loss account and a copy of the director’s report.

Micro-entities

Micro-entities are very small companies, usually with a turnover of £632,000 or less, ten employees or less or £316,000 or less on their balance sheet. Micro-entities can benefit from the same exemption available to small companies. Therefore, they can prepare simpler accounts that meet statutory minimum requirements and send only the balance sheet with less information to Companies House.

Arrange a consultation to discuss your circumstances

Are you looking for a dedicated contractor accountant? Look no further! Please call us on 01707 871622 or schedule a consultation to discuss our accountancy services and the options available for filing your annual accounts.

If you are considering setting up a limited company or would like to discuss our accountancy services, please call our Sales Consultants on 01707 871622 or request a tailored quote, and a member of the team will contact you.