If you operate as a Private Limited Company (Limited) in the UK, you are required to file a set of annual accounts and usually a company tax return, following the end of your financial year.
Particularly when you have only recently set-up, and are busy learning how to run a business, the associated statutory obligations can be daunting.
For the purposes of this Q&A, we are going ‘back to basics’ to ensure that you understand what is required, when it is required and how we can help you to not only stay compliant, but also to gain a valuable business tool in your accounts.
What are Limited Company annual accounts?
Annual, or ‘statutory’, accounts are prepared using a company’s financial records at the end of the financial year (also referred to as accounting period) and must be done so in accordance with either UK GAAP accounting standards or in some cases International Financial Reporting Standards (IFRS).
A full set of accounts typically includes a balance sheet, a profit and loss account, notes on the accounts and a directors report.
Companies that are not small or are carrying out certain activities or part of a wider group will generally also need to have their accounts audited.
There are many exemptions available for Small companies and in particular companies that qualify as Micro Entities to vastly reduce what needs be included in the accounts.
The company accounts will need to be filed with both Companies House and HMRC. It is worth noting that for Small Companies (and Micro) a filleted version of the accounts can be filed at Companies House meaning the information on Public Record is much reduced and things such as your profit and loss account do not need to be filed.
What is a company tax return?
At the end of each accounting period a company must calculate its Corporation Tax liability and complete a Company Tax Return (CT600).
The company Tax Return must be filed with HMRC together with the annual accounts. The filing of the accounts with HMRC has to be done using IXBRL tagging.
Certain types of Companies such as Charities can be exempted from filing a Company Tax return as can companies that are ‘dormant’, but this exemption generally needs to be applied for with HMRC.
I am a new Limited Company, when are my first annual accounts and company tax return due?
The deadline for filing annual accounts in your first year as a limited company, is different to that of an established organisation. Your first accounts are due exactly 21 months after the date your company was incorporated.
If your company was incorporated on 5 May 2021, your first accounts would need to be submitted by 5 February 2023, to cover the period 5 May 2021-31 May 2022.
Companies House will set your accounting period to be12 months after the end of the month that the company is incorporated however you can shorten or extend this if you would like a different period but he deadline of 21 months remains for filing the first set of accounts even if you chose to extend the accounting period.
Please note the maximum accounting period is 18 months and you can usually only extend this once in a five year period.
With the first submission taken care of, annual accounts must then be filed nine months after each financial year end. Taking the example above, accounts for the Year Ended 31 May 2023 would need to be filed by 28 February 2024.
Your Company Tax Return is due 12 months after your accounting period for Corporation Tax ends (normally covering the same period as your annual accounts) however you must pay any tax due 9 months and a day after the end of your accounting period. Some larger companies are different to this and have to pay their tax quarterly.
These deadlines for tax will change if you shorten or extend your accounting period. The maximum accounting period for tax purposes is 12 months so you can end up with a tax payment date before your accounts are due to be filed if you have an 18 month accounting period.
How do I file my accounts and company tax return?
Both your accounts and company tax return can be filed electronically.
My company is dormant. Do I still need to file annual accounts?
The simple answer to this is yes, if you want to keep the company going then you still need to file accounts, but these can be in a much simpler form. A company tax return would also still be required unless HMRC have been notified and agreed that one does not need to be completed.
What other submissions are required?
The main other filing requirement is the company’s Annual Confirmation Statement. This is a form to confirm who the officers and shareholders of the company are. Where there have been no changes the form is essentially just confirming that fact.
You should also be aware of the relatively new rules covering ‘Persons with Significant Control’.
A Person with Significant Control (PSC) is an individual or entity owning 25% or more of the shares of the company or having control through other means such as voting rights.
Every company must keep a register of PSC’s which is filed at Companies House. Any changes to a PSC should be notified to Companies house within 14 days.
I need to prepare my annual accounts for submission, and I don’t know where to start. What help can I get from an accountant?
Our trusted chartered accountants and business advisers, in Bedfordshire, Cambridgeshire and Hertfordshire, can assist you with the accurate preparation and timely submission of statutory accounts and company tax returns, to comply with accounting regulations as well as Companies House and HMRC requirements.
As part of our partner led service, we are here to support you throughout the year with strategic guidance, not just once a year when your accounts are produced.
To read more about the importance of year-end accounts, and how we can support you to fulfil your obligations and realise your potential, click here.