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Preparing the accounts of your public limited company is a legal obligation, but it can seem like a daunting task. Here is a rundown of what you need to do.

Company accounts include the complete annual accounts (statutory) and the tax return of your company. Statutory accounts are annual financial documents prepared at the end of your business’ year and sent to shareholders, Companies House and HMRC as part of your income tax return.

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All limited companies must file their business accounts annually, although small businesses can send simpler accounts than their larger counterparts.

Please use this article only as a guide and obtain professional advice before preparing your accounts. You can review government guidelines on business accounts and talk to an accountant.

Company accounts due

Each company must send a copy of its accounts for each fiscal year to each member of the company and file their accounts with Companies House. Accounts you deposit with Companies House are publicly available.

Normally, the time frame for submitting accounts to Companies House for a private company is nine months from your Accounting Reference Date (ARD). Your ARD refers to the end of your exercise.

When you create your company, your financial year begins on the day of incorporation and your first accounting reference date will be one year later, the last day of the month of your incorporation. Your ARD will then be on that date each year. For example, if you incorporated your company on July 6, 2018, your first ARD will be July 31, 2019, then July 31 of each year.

Since you deliver business accounts nine months after your ARD, that means your first business accounts are not due until 21 months from the date you registered with Companies House (your first fiscal year, plus nine months).

There are penalties for filing your late report, ranging from £ 150 for filing less than one month late, to £ 1,500 for filing more than six months late.

action Deadline
File first accounts with Companies House 21 months after registering with Companies House
Submit 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 financial year for corporation tax
Filing the company’s income tax return 12 months after the end of your company’s financial year for corporation tax

You use your business accounts and your corporation tax return to determine the amount of corporation tax payable, but confusingly, corporation tax is due before your tax return on corporations.

How to Prepare Business Accounts for a Small Business

Statutory accounts include:

  • balance sheet, which shows the value of everything the business owns, owes and is owed
  • an income statement, which shows the company’s turnover, operating costs, and any profit or loss made during the year
  • notes on the accounts

Depending on the size of your business, you may also need to include a director’s report and an auditor’s report.

But if the government views your business as a small business or one micro entity, you may be able to send simpler ‘short’ accounts to Companies House and you will not need to be audited.

Your business counts as small if it has at least two of the following:

This counts as a micro entity if it has at least two of the following:

  • turnover of £ 632,000 or less

  • £ 316,000 or less on his balance sheet

  • 10 employees or less

Small businesses and micro-entities can use an exemption so that their accounts do not need to be audited, and can choose whether or not to send a copy of the director’s report and profit and loss account. The balance sheet can be simpler.

Micro entities can prepare simpler accounts that only meet minimum legal requirements and send only their balance sheet to Companies House.

Statutory accounts must meet accounting standards, namely:

How to file business accounts

There is a lot of accounting software that you can use to prepare and file your annual accounts.

Or, if you are a small business or micro entity, you can use the Company Accounts and Tax Online (CATO) service, which allows you to submit your account data to both Companies House and HMRC.

You can also create your business accounts on paper and mail them to Companies House, but HMRC says paper accounts take a long time to process.

Regarding the corporate tax return, you must file the declaration online. You can only use the CT600 paper form if you have a reasonable excuse for not being able to file online, or if you wish to file in Welsh.

Can I prepare my own public limited company accounts?

You can choose to do your own bookkeeping for your limited company, including preparing and filing your annual accounts.

However, most limited companies hire an accountant to manage their finances. The structure and obligations of a limited company are more complex than those of a sole proprietorship, which means that it can be difficult to do everything yourself. There are severe penalties if you make a mistake.

Accountants are experts in corporate finance – if you hire a good accountant, they’ll be able to take the stress out of filing your accounts with HMRC and Companies House. They can help you meet all legal requirements and avoid penalties, ensuring that the company’s accounts comply with accounting standards.

However, it is important to understand that even if you hire an accountant, the directors of the company are still the ones who are legally responsible for ensuring that the accounts are accurate.

Limited Liability Company Account Template

Your accountant or accounting software will usually help you format your annual accounts correctly and include all the necessary information. As we said, what you need to include in your accounts will depend in part on the size of your business.

If you would like to check the format and content required for your statutory accounts, you can review the relevant regulations, which can be viewed on the government legislation website. The accounts must comply with UK accounting standards.

There are templates and examples of limited liability company accounts available online, including on the Sage website.

Be careful when using online templates as they might not meet good standards for business accounts. Consult a professional if you are unsure of anything.

What are your biggest difficulties when filing your annual accounts? Tell us in the comments.

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