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Annual accounts essentially report on a company’s financial activities over a specific financial year. They’re also often known as ‘business accounts’, ‘financial accounts’ or ‘legal accounts’.

Who should file annual accounts?

Every type of business will benefit from preparing annual accounts, but for some structures it’s mandatory to do so. You’ll need to submit your annual accounts to Companies House if you operate as a limited company, Limited Liability Partnership (LLP) or a Community Interest Company (CIC).

Private limited companies(Ltd) This is the most common company set up in the UK. Limited companies have at least one director and are owned by shareholders.
Public Limited Companies(Plc) This type of company is listed on the stock exchange.
Limited Liability Partnerships (LLP) Limited Liability Partnerships (LLPs) are owned by partners who benefit from limited liability. This means they are not personally liable for any debts the business incurs.
Companies Limited by Guarantee (CLG) Companies Limited by Guarantee (CLG) don’t have shareholders. Instead, they have members who commit to paying a set amount of money if the company is ever wound up.
Community Interest Companies (CIC) Community Interest Companies (CICs) are set up to benefit a specific cause or project rather than shareholders. They must include a profit and loss statement, balance sheet, and notes on the accounts in their submission.
Charitable Companies Charitable Companies are set up for charitable purposes. Again, their annual accounts submission must include a profit and loss statement, balance sheet and notes on the accounts.

What should annual accounts include?

This partly depends on whether your business is classed as dormant, a micro-entity, a small company, or a larger organisation.

Medium and large companies must deliver full annual accounts (sometimes known as “statutory accounts”) to HMRC and Companies House, and they should include:

  • Profit and loss statement showing the company’s sales, running costs, and profit or loss over its financial year
  • Directors’ report
  • Balance sheet
  • Name and signature of company director
  • Notes about the accounts, such as the details of any advances, financial commitments, contingencies or guarantees
  • An auditor’s report (unless the company is eligible for an exemption)

The requirements for filing annual accounts are slightly different for smaller and dormant businesses.

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Company accounts for small and micro companies

It’s important to know the difference between small, micro, and dormant accounts so you know if your company falls into one of these categories and what type of accounts you need to file.

Small companies

Your business will be classed as a small company if it meets at least two of these criteria during the financial year:

  • Fewer than 50 employees
  • An annual turnover of no more than £10.2 million
  • A balance sheet total less than £5.1 million

Small company accounts aren’t audited so you won’t need to include an auditor’s report.

Micro-entity accounts

Micro-entity accounts have even fewer requirements than small company accounts, and your business will be eligible if it meets at least two of these criteria:

  • A maximum of 10 employees
  • Annual turnover of no more than £632,000
  • A balance sheet total under £316,000

Like small businesses, micro entities still need to send statutory accounts to HMRC and to company members, but won’t need to include a director’s report.

What about the Companies House reforms?

Companies House announced a series of reforms which mean small and micro-entities will soon need to submit Profit and Loss Statements as part of their accounts. The start date for this is not yet confirmed.

What about dormant company accounts?

Dormant companies are only expected to file dormant accounts containing a balance sheet and notes about the accounts. Nothing needs to be submitted to HMRC, but for Corporation Tax purposes they must tell HMRC that the company is inactive.

How and when do I submit my company accounts?

You’ll normally need to file your company accounts no later than 9 months from the end of your company’s financial year unless it’s your first set of accounts. The deadline to file first accounts with Companies House is 21 months after the date you incorporated the company.

You can normally file your accounts online, depending on what sort of business you operate and whether or not it needs an auditor.

Learn more about our online accounting services, including annual accounts. Call 020 3355 4047 or get an instant online quote.

About The Author

Beth-Anne Karellen

I'm an experienced and fully AAT and ACCA qualified accountant, who is enthusiastic about helping business owners succeed. I also love cooking and needlepoint (at different times!). Learn more about Beth.

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