Every year a company must file accounts. Company accounts are documents prepared at the end of a financial year which show how a company has performed over the accounting period.
No matter whether you have been successful, breaking even, not trading, or dormant you still need to file accounts with both HMRC and Companies House.
This blog post relates to the accounts you must be file with us at Companies House. For any enquiries regarding HMRC accounts or tax related matters, you’ll need to contact HMRC directly.
What accounts you need to file
A set of accounts will usually consist of:
- a profit and loss account
- a balance sheet
- a director’s report
The profit and loss account shows the company’s sales, running costs and the profit or loss it has made over the last year.
The balance sheet shows the value of everything the company owns, owes and is owed.
The notes provide supporting information and help users of accounting information understand the current financial position of the company.
The directors report provides information on:
- whether the company’s finances are in good health
- how well the company's performing
- whether the company has capacity to expand and grow
- how well the company's complying with financial regulations
Small companies can choose to file abridged accounts which are a simplified version of your accounts and do not require a director’s report or a profit and loss account. To qualify as a small company, you need to meet 2 of the following criteria:
- your turnover is less than £10.2 million
- your balance sheet is less than £5.1 million
- you have fewer than 50 employees
Companies with even smaller turnovers will be regarded as micro-entities To file micro-entity accounts, your company must meet the following criteria:
- your turnover does not exceed £632,000
- a balance sheet not exceeding £316,000
- no more than 10 employees
In some circumstances an auditor’s report may be necessary, but companies who qualify as small or micro-entities can take advantage of audit exemption.
When you need to file your accounts
Every company will have an accounting reference date. This will be the date from which your deadline for filing your accounts will be calculated.
For new companies it will be the anniversary of the last day in the month the company was incorporated.
For existing companies, it will be the anniversary of the day after the previous financial year ended. The time allowed for delivering accounts is 9 months from the accounting reference date.
If you’re still not sure when your accounts must be filed, you can simply sign into the Find and update company information service, find your company, and on the overview screen, the due date for your accounts will be shown.
By signing up to the email reminder service you’ll be notified in good time when your accounts are due.
Remember to plan ahead. Make sure you know your company’s deadlines and prepare your accounts in advance. Do not leave it until the last minute.
How to file your accounts
The quickest and easiest way to file your accounts is online. Once you have decided on the type of accounts you need to file, you can follow the online instructions or watch our ‘How to’ videos to show how it’s done:
To file online you’ll need to:
- register for online filing
- provide an email address
- choose 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.
Who can file your accounts
If you feel confident, you can file your accounts yourself. There are a range of software products that can help you to prepare and file.
Many companies will choose to use a professional such as an accountant to act on their behalf. As well as filing for you, a professional can offer business and financial advice to help you make the right decisions.
You should note that even if you use someone to file for you, it’s the responsibility of the directors to make sure the accounts are filed - and filed on time.
No matter which option you go for, keeping accurate and organised records throughout the year will help when it’s time to fill in your returns.
For guidance on running a company and your responsibilities as a director, sign up to our upcoming bitesize webinar series.