This year will see a number of changes to the requirements that companies must comply with when preparing and filing their annual accounts. In this blog I’ll provide an overview of the changes.
New accounting regulations for companies
The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 came into force on 6 April 2015. These regulations apply to the changes contained within the EU Accounting Directive to UK companies, which amends the Companies Act 2006 and related secondary legislation.
The regulations apply to accounting periods beginning on or after 1 January 2016, although companies may choose early adoption for accounting periods beginning on or after 1 January 2015.
The key change in these regulations is the removal of the ability for a small or medium-sized company to file abbreviated accounts with us at Companies House. A company will now be required to file the accounts they prepare for their members at Companies House (although a small company or micro-entity will usually be able to choose not to file their profit and loss account or director's report).
However, this does not mean that all small companies are now required to file full accounts, the very smallest companies may disclose less information by preparing micro-entity accounts. Other small companies may, instead of filing full accounts, choose to prepare a set of abridged accounts for their members and then file these with us.
Abridged accounts contain a reduced set of information when compared to full accounts and the filing requirements for small company abridged accounts and the relevant balance sheet formats can be found in the Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008 as amended by the Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015.
New accounting regulations for Limited Liability Partnerships (LLPs)
The Department for Business, Innovation and Skills is currently working on regulations that will apply the changes in the Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 to Limited Liability Partnerships (LLPs). This will mean that LLPs will no longer be able to file abbreviated accounts and, like companies, will now have the option to prepare and file abridged accounts instead. The regulations will also extend the ability to file micro-entity accounts to LLPs, which will reduce the burden on the smallest LLPs by enabling them to file a reduced set of information.
New accounting standards
The Financial Reporting Council (FRC) have revised the accounting standards under which UK companies prepare their accounts. More information about this change can be found on the FRC’s website.
Some of the main changes are as follows:
- a new statement will be required to be delivered in a set of small company abridged accounts to indicate that the members have agreed to the abridgement
- the thresholds for a company size have changed, for a small company the turnover limit rises from £6.5m to £10.2m and the balance sheet total limit rises from £3.26m to £5.1m. The total number of employees remains at a maximum of 50
- for a medium-sized company the turnover limit rises from £25.9m to £36m and the balance sheet total limit rises from £12.9m to £18m. The total number of employees remains at a maximum of 250
We realise that some of you will want further information and so we are currently working on producing more detailed guidance on some of these changes later in the year. Keep an eye on our website for updates.