Filing Annual Accounts at Companies House? Learn how
Annual accounts are the annual financial statements of a company. It is a requirement by law to file your company’s annual accounts with Companies House. In this article, we will discuss the details you must know about before filing your annual accounts. We will cover different types of annual accounts, the time frame for filing annual accounts, and the accounting reference date. We will also answer some common questions about annual accounts. So, if you’re looking for information on Annual Accounts, you’ve come to the right place!
so what are annual accounts?
As mentioned, annual accounts are the annual financial statements of a company. The purpose of preparing annual accounts is to give a true and fair view of the company’s financial position, performance, and cash flows for the year. In other words, it allows shareholders and other interested parties to assess how well the company has performed financially over the year.
What are the types of limited Company Accounts?
There are different types of limited company accounts and it is important to understand each one to ensure you file the correct accounts with Companies House. These accounts include:
- a profit and loss account
- a balance sheet
- notes about the accounts
- a directors’ report
- an auditors’ report (unless the company qualifies for exemption)
- name and signature of company director
The types of limited company accounts are as follows:
Small Company Accounts:
Small limited companies must file small company financial statements with Companies House each year unless it meets two of the following criteria for two years in a row, then they will be classed as medium-sized and need to file full annual reports and audited financial statements instead of (small) abbreviated ones.
- Annual turnover not greater than £10.2m
- Balance sheet total not greater than £5.1million
- Number of employees fewer than 50
Micro Entity Accounts:
This type is only available to micro-businesses, i.e., those that meet at least two out of three qualifying conditions listed:
- Annual turnover not greater than £632,000
- Balance sheet total not greater than £316,000
- Number of employees fewer than 10
Medium-Sized Company Accounts:
Most companies that do not meet the criteria for a small company or micro-entity accounts will need to file medium-sized company annual accounts. The main difference between medium and large company accounts is that medium companies must disclose their directors’ remuneration in the notes to their financial statements. In order to be medium-sized, your company must have an annual turnover of no more than £36 million, a balance sheet total of no more than £18 million, and an average number of employees of no more than 250.
Large Company Accounts:
Companies that have an annual turnover greater than £36 million, a balance sheet total greater than £18 million, and 250 employees or more must file large company accounts. These accounts are much more detailed and must be audited by an external auditor.
Dormant Company Accounts:
If your company has been inactive for the past 12 months (i.e., it has not carried out any business transactions), then you will need to file dormant company accounts instead of annual returns.
Who can file annual accounts?
All companies registered in the UK must prepare and file annual accounts with Companies House. This includes both private and public companies, as well as limited liability partnerships (LLPs). There are certain exceptions to this rule, such as dormant companies and charities.
The quickest and easiest way to file your accounts is online. You can follow the online instructions or watch our ‘How to’ videos on YouTube to see how it’s done.
To file online, you will need:
To use the online service, you need to:
- register by providing your email address and choosing a password
- have the company’s authentication code to hand
The online service has built-in checks to make sure all the necessary information is entered before you submit. You’ll be emailed automatically when your accounts have been received, and again to tell you whether they have been accepted.
The time frame of Annual Accounts and HMRC
You must send your first annual accounts to Companies House within 21 months of incorporation. Usually, these cover a period of just over 12 months. The accounting reference date is normally the anniversary of the last day of the month of company formation.
Normally, you should deliver annual accounts to Companies House within 9 months after the end of the accounting year. You must include full annual accounts for HMRC with each Company Tax Return. You must file online no later than 12 months after the end of each Corporation Tax accounting period.
Accounting Reference Date (ARD)
The accounting reference date (ARD) is the last day of a month at which an organization’s financial year ends; it is also the date from which annual accounts are prepared. The ARD is important because it sets the timeframe for a number of Company House and HMRC deadlines.
When you form your company, Companies House will set the ARD as the anniversary of your company’s incorporation date. Your first accounting period will end on that day each year and you must file annual accounts for that period with Companies House within nine months after the end of it.
When you form your company, your financial year starts on the day you incorporate. Your first accounting reference date (ARD) will be a year later, on the last day of the month you incorporated. Your ARD will then be on this date every year. For example, if you incorporated your company on July 6, 2019, your first ARD would be July 31, 2020, and then it would be July 31 every year. As you deliver company accounts nine months after your ARD, this means your first company accounts aren’t due until 21 months after the date you registered with Companies House (your first financial year, plus nine months).
If you file your report late, you will have to pay a penalty. The amount of the penalty depends on how late you file your report. If you file within a month of the deadline, you will have to pay £150. If you file more than six months after the deadline, you will have to pay £1,500.
|File first accounts with Companies House||21 months after registering with Companies House|
|File annual accounts||Nine months after the end of your company’s financial year|
|Pay corporation tax (or tell HMRC you don’t owe any)||Nine months and one day after the end of your company’s accounting period for corporation tax|
|File company tax return||12 months after the end of your company’s accounting period for corporation tax|
It is possible to change your accounting reference date, but you must get written consent from HMRC before doing so. You can apply to change your ARD online.
Is it possible to prepare my own company accounts?
It is not a requirement to hire an accountant to prepare your annual accounts, but it might be worthwhile if you do not want the hassle of doing it yourself. If you decide to prepare your own company accounts, keep in mind that they must follow prescribed formats and be accompanied by notes. You also need to include details about any money paid or owed (debts) by directors and shareholders through loans made to the company as well as share capital. It’s important these are correct because failure to disclose this information can lead to penalties and even criminal liability for fraud.
Accountants are experts in this field, so if you decide to hire a professional, choose one with plenty of experience and ask for references. Hiring an accountant is essential because they can recommend the most suitable type of annual return filing procedure for your business.
Do I need an accountant to prepare my annual accounts?
It is advisable to seek professional assistance when preparing your annual accounts, even if you are not legally obliged to do so. This is because there are specific rules and regulations that must be followed when compiling company accounts, and an accountant will have the knowledge and experience to ensure these are adhered to. Failing to prepare accurate annual accounts could result in penalties from Companies House or HMRC.
What is the difference between annual accounts and annual confirmation statements?
Although both documents relate to a company’s financial year, there are some key differences between annual accounts and annual confirmation statements. Annual accounts must be prepared in accordance with the Companies Act and include a full set of financial statements, while annual confirmation statements only require directors to confirm that certain information (e.g. the company’s registered name, type, and address) is still correct.
How to create your Companies House accounts?
If you decide to prepare your own company accounts, they must be compiled in accordance with the format prescribed by Companies House. This usually means using software such as Sage, Xero, or QuickBooks which will produce accounts in the required format automatically. If you do not have access to these types of software, you can use HMRC’s free online accounting service – Simple Completion – which will help you to complete and submit your company accounts
How to submit amended accounts to the Companies house?
If you have made an error with your annual accounts, it is possible to submit amended accounts to Companies House. You can send the amended document through:
- The company’s online filing account
- on paper by post
If you are sending amended accounts on paper, you must clearly state in your new accounts that they replace the original accounts. These new statutory accounts must be prepared as they were at the date of the original accounts.
Write “amended” on the front of your accounts so that Companies House knows 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 account.
Filing annual accounts is a legal requirement for all limited companies, but it’s advisable to seek professional assistance regardless. Make sure you are aware of the specific rules and regulations that must be followed when compiling your company accounts and choose an accountant with plenty of experience to help ensure these are complied with. If you need to make amendments to your annual accounts, Companies House provides several methods for doing so.
If you have any questions about filing annual accounts or would like some advice on choosing an accountant, please get in touch. Our team would be happy to help!
Jibran Qureshi FCCA is the Managing Director of Clear House Accountants and has over 10 years of experience in practice and across multiple industries. Jibran’s educational background includes a Master’s in Financial Strategy from Oxford University and an Executive MBA from Hult International Business School. His experience in Financial Strategy, Tax Planning, Operational Consultancy, and Performance Reporting guide his cognizant approach to leading Clear House and its clients to the future. It was this dexterity that led him to be Enterprise Nation’s Top 50 Advisors.
Jibran is fueled by his passion for helping businesses. He unequivocally believes that as business advisors and accountants for our clients, it is our responsibility to work with them as business partners. As specialists, it is our duty to help our clients navigate through the complexities of constant change and the implications that come with it.
Over the past decade, innovative disruptions have changed the way businesses work, everything from cloud software, innovative business models, to AI and machine learning, has impacted how businesses operate, grow, and expand.
Jibran recognized the need to manage these disruptions sustainably, early on and shaped Clear House Accountants to not just be compliance specialists, but advisors who help build complex ecosystems around cloud accounting software, provide advice on funding support, help manage innovative tax schemes, set up and implement complex strategic plans, and much more. So, his clients can thrive, not just survive.
Jibran developed his prime role as the Managing Director to build Clear House’s capabilities so it can add value for its clients. He is of the firm belief that this can be done through consistent high-level training, building the right tools, and creating roadmaps to help businesses cope with prospective disruptions. He envisages that every client that comes on board, is provided maximum value through onboarding, ongoing services, and the right mix of tools to help them become the best in the world.