What accounts must a Limited Company submit? Watch our video for some useful guidance.
Who are the accounts for?
Every limited company must prepare accounts and a corporation tax return.
Well, firstly, for the shareholders of the company, the owners need to know what the profit loss has been and what assets the company has.
Secondly, for HMRC, how will they know what tax you need to pay if they haven’t seen a set of accounts.
They are also for Companies House, the government body that looks after all companies and thr accounts that go to Companies House are actually publicly available for anyone to download and look at.
What accounts do I file?
Well, the statutory accounts include a balance sheet, which effectively states the assets and liabilities of the company.
There’s a profit and loss account showing the sales, the expenses, that summarise it down to a profit or a loss, a director’s report, which is a short statement by the directors on how the business is going, and then an auditor’s report, when an independent body, an auditor, actually certifies that those accounts are broadly correct.
Now, you may be able to file abridged accounts, these abridged accounts would only have the balance sheet, profit loss and directors report. You don’t need an audit.
To be able to do this, you need to fulfil two out of these following three criteria:
- Your sales must be less than £10.2 million in the year
- You must have less than £5.1 million of assets
- You must have less than 50 staff
And that, like I say, does cut down on the admin and what you need to file.
If you are a smaller business, you can actually file micro-entity accounts.
To do this, again, there’s two out of three criteria you have to hit:
- Your sales need to be less than £632,000
- Your assets must be less than £316,000
- You must have less than 10 staff
In this instance, your balance sheet is abbreviated even more so, and with both the abridged accounts and the micro-entity accounts, you only file the balance sheet to Companies House, i.e., the general public can only download your balance sheet.
They can’t see your sales for the year or your expenses for the year. So, as well as the admin side, there are some privacy benefits of filing the smaller accounts.
When are the deadlines?
If in your first year of trading, you trade for a year, and then your deadline will be 21 months after your date of incorporation.
After that, each year your end passes, and you get nine months after the year end to file your accounts with Companies House and HMRC.
So as an example, let’s say you incorporate your business on the 1st of January 2018.
You trade for a year and then actually your year-end will be the 31st of January 2019, because the default is that Companies House always give you the last day of the month.
But the deadline to file will be on the 1st of October 2019, i.e, 21 months after the date you set the company up.
The following year, your next year end will be on the 31st of January, 2010, but then you do get the nine months to 31st of October, 2010 to file those accounts and the tax return, and that will carry on for every year after that.
What happens if you’re late?
Well there are fines. You’re fined £150 by Companies House if you’re late and, broadly, the fines increase every three months after that.
And that fine does get up to £1,500 if you’re more than six months late. So, my obvious advice is get them in on time, to an extent, the earlier, the better.
You don’t have to wait until nine months after the year end. If you can do them early, file them, and in terms of the tax, you know what tax you’ve got to pay.
You still don’t pay it until nine months after the year end, but you know what it is and, if need be, you’ve got time to save for it.
If you would like any more information, please get in touch.