If you’re a limited company owner in the UK, you are legally responsible to file statutory accounts on annual basis. As a small and medium-sized business, you have the choice to either submit a full or abridged set of accounts. Abridged versions of the account contain fewer details but meet the requirements of HMRC and Companies House. In this post, we’ll have a look at what are statutory accounts, what do they include, what statutory accounts small businesses, micro-entities and dormant companies need to submit. Read on to find out!
These are important for operating your business to let the shareholders know how your company is performing. In addition, these are also needed to update them to Companies House. These include a balance sheet, profit and loss statement, cash flow statement and notes of the accounts and director’s report.
What are Statutory Accounts?
These accounts are also called annual accounts. These are the set of financial reports prepared at the end of a financial year. These accounts are used for reporting the performance and the financial activity of a limited company. In addition, you can also calculate the corporation tax using these accounts. Generally, the copies of statutory accounts are sent to:
- Companies House
- A person who attends the company’s general meetings
What Do Statutory Accounts Include?
You need to ensure that statutory accounts are following the UK GAAP standards and they must include:
- A Balance Sheet: A financial document that shows what a company owns, and what it needs to pay at the end of a financial year
- Profit and Loss Statement: This statement shows the net profit or loss of a business
- Notes about the accounts
You might also need a directors’ report and an auditors’ report based on your business size.
Statutory Accounts for Small Business, Micro Entities & Dormant Companies
If you’re classed as a small business in the UK, you can send an abridged version of accounts to Companies House. These accounts contain simple information on the balance sheet and there is less information available on the public records. You’d be considered small if you fall within two of the following:
- Your total business turnover below £10.2 million
- You have a turnover of £5.1 million or less on the balance sheet
- Your number of employees is up to 50 or less
If your company is very small and falls under two of the following, it’d be called micro-entity:
If it has a turnover of £632,000 or below
It has a turnover of £316,000 or below on its balance sheet
It has 10 employees or less
Micro entities need to send a very simple version of statutory accounts containing small information and submit it to Companies House. The exemptions for micro-entities are similar to the of small companies.
If your business had no significant transactions over the last financial year, it is called dormant as per Companies House. Here significant transactions include financial transactions that you need to report. It excludes the penalties for filing accounts late, fees paid to Companies House, etc. Companies that are small, micro or dormant don’t need to be audited or they are not required to submit auditor’s report.
Quick Sum Up
By reading this post, you have got a basic overview of what are statutory accounts, what do they include and what statutory accounts small businesses, micro-entities and dormant companies need to submit. Preparing and submitting these accounts can be complex and burdensome for the one lacking the financial background.
Therefore, it is advisable to contact our accountants to prepare and file your statutory accounts. Get help from our Qualified Accountants, Bookkeepers, Tax Experts. Compare their Services & Fee, and Signup now in 3 minutes at Accounting Firms!
Disclaimer: This blog is written for general information on statutory accounts.