If you run a limited company you will be required to submit various reports to Companies House and HMRC.
The following is a brief overview of the main reports required and what they should contain.
If you are a small limited company you may be entitled to file abbreviated accounts to Companies House. The current criteria (from 6th April 2008) for a small company is that you must meet at least two of the following conditions:
- Annual turnover must be no more than £6.5 million
- Balance sheet total must be no more than £3.26 million
- Average number of employees must be no more than 50
The advantage of this is that abbreviated accounts require much less information than full accounts, therefore competitors and the general public will not see detailed information regarding your accounts. Also, most small companies do not require a full audit.
Abbreviated accounts contain a basic balance sheet, which show the assets and liabilities of the company. Assets include things such as bank balances, equipment, vehicles, trade debtors (money customers owe you). Liabilities may include loans, overdrafts, trade creditors (money you owe suppliers. By adding up assets and taking away liabilities it gives a snapshot of your company’s net value. This of course doesn’t provide the full picture, as doesn’t take into account your order book, goodwill, brand, reputation etc.
These accounts should be filed with Companies House 9 months after the year end and can be filed online or sent by post.
Many clients get confused when they receive annual return reminders, and think this is their accounts submission. The Companies House Annual Return is an online form confirming company details, i.e. current directors, shareholders, registered address etc. It usually should be fairly straightforward and you will need to pay a filing charge each year to Companies House, which is currently £14.
It is important to file this return, otherwise Companies House may start the process of dissolving your company, which could freeze your bank accounts.
These accounts are a much more detailed version of abbreviated accounts and will also include a profit & loss account or income statement. A profit & loss account shows your revenue (sales) and detailed costs resulting in either a profit or a loss. These accounts should be produced at the same time as your abbreviated accounts, but if you are a small company you may just keep them internally for the management team to view the performance of the company. Your bank manager may also require you to provide them to him/her as well each year.
These are a software generated version of the full accounts that is required for submission with your corporation tax return.
This needs to be submitted 12 months after the year end to HMRC, and confirms the corporation tax calculation. Payment is due before submission, which is 9 months and 1 day after year end.
This needs to be filed electronically and the iXBRL accounts should accompany the submission.
You are not required by law to have an accountant prepare or sign these accounts/reports. If you have experience and expertise in preparing these reports you can prepare them yourselves. However, if you aren’t sure about what you are doing, it is a good idea to engage an accountant to prepare these correctly, as mistakes can be very costly.