Our Guide to Limited Company Accounts

Ainsworth Accountants provide a full Year End Accounts preparation and filing service.

Guide to Preparing and Filing Limited Company Year End Accounts and Corporation Tax

Limited Company Directors are responsible for the preparation of the company's Year End Annual Accounts, legally known as "Statutory Accounts"

For "Small Companies" there are effectively 3 sets of Accounts to be prepared and filed:

• Statutory Accounts to be presented to all Shareholders.

• Statutory Accounts plus additional information to be filed with HMRC.
   [12 months after the Year End date]

• Abbreviated Accounts to be filed with Companies House.
   [9 months after the Year End date]

Although this is extra work, it does not triple the work. Your accountant will prepare a main set of statutory accounts, then ensure the right accounts are filed in the right place.

In 2013, new regulations were introduced for "Micro-Entities", which permit Micro-Entities to produce reduced versions of their Statutory Accounts and Abbreviated Accounts. These reductions mainly apply to the additional pages of Notes. The fundamental accounting and tax work still needs to be completed.

Small businesses and Contractors will therefore be likely to take advantage of the special regulations for either:

• Small Companies, or,
• Micro-Entities (even smaller than Small Companies)

Contents of Statutory Accounts

The contents of Statutory Accounts are stipulated in the Companies Act 2006, and other Accounting Standards and Guidelines.

Statutory Accounts for "Small Companies" (see below) must include:

• Balance Sheet which lists company's assets and liabilities at the end of the financial year (Year End), and must be signed by a Director.

• Profit and Loss Account which summarises the company’s sales, expenses and the profit or loss in the financial year.

• Notes to the Accounts, including more details of Fixed Assets, Directors' remuneration, and transactions with Directors.

• Directors' Report.

• Accountants’ report.

Accounting Standards & Guidelines

A Small Business's statutory accounts will normally be required to follow the rules under "UK Generally Accepted Accounting Practice" (UK GAAP).

Small Companies

A company is a Small Company if it meets 2 of these 3 conditions:

• Turnover less than £6.5m
• Net Assets less than £3.26m
• Fewer than 50 employees

A Small Company may:

• File Abbreviated Accounts (see below) to Companies House - that is a shorter version of the full Statutory Accounts - this means that less information about the company will be available to the public
• Choose not to be audited
• Not file a copy of the Director’s Report

Abbreviated Accounts for 'Small Companies'

Abbreviated Accounts can be filed by Companies House Webfiling.

Abbreviated Accounts for Small Companies are:

• Balance Sheet (signed by a director)
• Reduced Notes

Note: The full Statutory Accounts must still be prepared for the shareholders and filed with HMRC with your Company Tax Return.

Micro-Entities

A company meets the qualifying conditions for a micro-entity if it meets at least two out of three of the following thresholds:

• Turnover: Not more than £632,000
• Balance Sheet total: Not more than £316,000
• Average number of employees: Not more than 10

Micro-Entities' Accounts

• A simpler Balance Sheet and Profit and Loss Account, though the accounting work and principles behind them remain the same. It's a case of categorising the various Accounts into reduced headings.

• No Notes to the Accounts are required, except, where applicable, details of any advances, credit and guarantees with directors, and details of other more complex financial arrangements that would not often apply to small businesses and contractors.

Filing your Year End Accounts and Company Tax Return (CT600) with HMRC

The annual Statutory Accounts and the Company Tax Return normally cover the same period of time, usually a year, so they are filed with HMRC together. Filing must be done digitally, either online or using specialist accounting software.

Links to more information

Gov UK: Accounts and tax returns for private limited companies

Micro-Entity Accounts Exemptions