Ambassador House | 61 Worcester Street | Wolverhampton | WV2 4LQ

Annual Accounts

End of year accounts are required by HMRC, Companies House and shareholders of your business. We prepare these annual accounts in accordance with up-to-date tax legislation and regulations in order to provide a clear picture of your business’s financial health. By using our bookkeeping service, we can help to reduce the time and cost involved in preparing annual accounts.

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“Our specialist team will communicate with you on regular basis, aided by our automated email system informing of upcoming deadlines to ensure these are met in a timely manner. ”

Table of Contents

Overview

Your company’s annual accounts – called ‘statutory accounts’ – are prepared from the company’s financial records at the end of your company’s financial year.

You must always send copies of the statutory accounts to:

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

You have different deadlines for sending your accounts to Companies House and your tax return to HMRC, but you may be able send them at the same time.

If your company is small, a micro entity or dormant, you might be able to send simpler (‘abridged’) accounts.

How to put together statutory accounts

Statutory 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’, which shows the company’s sales, running costs and the profit or loss it has made over the financial year
  • Notes about the accounts
  • A director’s report (unless you’re a ‘micro-entity’)

You might have to include an auditor’s report – this depends on the size of your company.

The balance sheet must have the name of a director printed on it and must be signed by a director.

Accounting standards

Your statutory accounts must meet either:

  • International Financial Reporting Standards
  • New UK Generally Accepted Accounting Practice

Micro-entities, small and dormant companies

You might be able to send simpler (‘abridged’) accounts to Companies House and not need to be audited. This depends on whether your company is dormant or qualifies as a small company or ‘micro-entity’.

You must still send statutory accounts to your members and to HM Revenue and Customs (HMRC) as part of your Company Tax Return if you’re a small company or micro-entity.

Dormant companies

Your company is called ‘dormant’ by Companies House if it’s had no ‘significant’ transactions in the financial year that you’d normally report. Significant transactions do not include:

  • Filing fees paid to Companies House
  • Penalties for late filing of accounts
  • Money paid for shares when the company was incorporated

Dormant companies that qualify as ‘small’ do not need to be audited.

Check if your company is also dormant for Corporation Tax.

Small companies

Your company will be ‘small’ if it has any 2 of the following:

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

If your company is small, you can:

  • Use the exemption so your company’s accounts do not need to be audited
  • Choose whether or not to send a copy of the director’s report and profit and loss account to Companies House
  • Send abridged accounts to Companies House

Sending abridged accounts

You can only send abridged accounts if all your company members agree to it.

Abridged accounts must contain a simpler balance sheet, along with any notes. You can also choose to include a simpler profit and loss account and a copy of the director’s report.

The balance sheet must have the name of a director printed on it and must be signed by a director.

Sending abridged accounts means less information about your company will be publicly available from Companies House.

Micro-entities

Micro-entities are very small companies. Your company will be a micro-entity if it has any 2 of the following:

  • A turnover of £632,000 or less
  • £316,000 or less on its balance sheet
  • 10 employees or less

If your company is a micro-entity, you can:

  • Prepare simpler accounts that meet statutory minimum requirements
  • Send only your balance sheet with less information to Companies House
  • Benefit from the same exemptions available to small companies

Find out exactly what to include in your accounts depending on your company type, for example micro-entity, small, medium or dormant.

Corrections and amendments

You must send amended accounts to Companies House on paper.

Amended or corrected accounts must be for the same period as the original accounts.

You must clearly say in your new accounts that they:

  • Replace the original accounts
  • Are now the statutory accounts
  • Are prepared as they were at the date of the original accounts

Write “amended” on the front so that Companies House know your accounts are not duplicates.

Your original accounts will remain on file at Companies House.

If you only want to amend one part of your accounts, you need to send a note saying what’s been changed. The note must be signed by a director and filed with a copy of the original accounts.

Penalties for late filing

You’ll have to pay penalties if you do not file your accounts with Companies House by the deadline.

Time after the deadlinePenalty (for private limited companies)
Up to 1 month Up to 1 month
1 to 3 months £375
3 to 6 months £750
More than 6 months £1,500

Penalties for public limited companies are different.

You’ll automatically receive a penalty notice if your accounts are filed after the deadline.

The penalty is doubled if your accounts are late 2 years in a row.

You can be fined and your company struck off the register if you do not send Companies House your accounts or confirmation statement.

Appeal against a late filing penalty

If you want to appeal a penalty you must:

  • Give a specific reason for not filing your accounts on time
  • Include all relevant details, such as dates and times
  • Prove the circumstances were out of your control, for example a fire destroyed your records a few days before your accounts were due

If you need help with your appeal because you have a disability or a health condition, you can contact Companies House.

Your appeal is likely to be unsuccessful if it’s because:

  • These were your first accounts
  • Your company is dormant
  • Your company is a charity or a flat management company
  • You cannot afford to pay
  • Another director is responsible for filing the accounts
  • It was your accountant’s (or anybody else’s) fault
  • You did not know when or how to file your accounts
  • Your accounts were delayed or lost in the post
  • The directors live or were travelling overseas

You can send a letter to the address on the front page of the penalty invoice, or send an email including the penalty reference.

Companies House
enquiries@companieshouse.gov.uk

You’ll get a response within 20 working days and the penalty will not be collected while your appeal is being considered.

Challenging an unsuccessful appeal

If your appeal is rejected and you have additional information to support your case, you can write to the senior casework manager in the Late Filing Penalties Department at the Companies House office that deals with your account.

If your appeal to the senior casework manager is unsuccessful, you can write to the independent adjudicators, and ask them to review your case.

If your appeal to the independent adjudicator is unsuccessful, you can submit a final application to the Registrar of Companies at the office that deals with your account.

You must follow this process, otherwise the registrar will not review your appeal.

Find out more about late penalty appeals in different situations.

Have a question?

Read through our FAQ section below.

Your records must show you’ve reported accurately, and you need to keep them for 3 years from the end of the tax year they relate to. HMRC may check your records to make sure you’re paying the right amount of tax.

There are many payroll software systems on the market for Start Ups, SME’s and large businesses. For our clients we we use Xero; for more information about Xero please visit their website www.xero.com/uk/accounting-software/payroll/

You will need to complete the following forms or maintain the equivalent digital records:

P11 Deductions Working Sheet
This form (or a computer-generated equivalent) must be maintained for each employee. It details their pay and deductions for each week or month of the tax year.

P60 End of Year Summary
This form has to be completed for and given to all employees employed in a tax year.

P45 Details of Employee Leaving
This form needs to be given to any employee who leaves and details the earnings and tax paid so far in the tax year. New employees should let you have the form from their previous employer.

Starter Checklist
When a new employee starts you will need to advise HMRC so that you can pay them under RTI. Some of the necessary information may be obtained from the P45 if the employee has one from a previous job.