Annual accounts essentially report on a company’s financial activities over a specific financial year. They’re also often known as ‘business accounts’, ‘financial accounts’ or ‘legal accounts’.

Who should file annual accounts?

Every type of business will benefit from preparing annual accounts, but for some structures it’s mandatory to do so. You’ll need to submit your annual accounts to Companies House if you operate as a limited company, Limited Liability Partnership (LLP) or a Community Interest Company (CIC).
 

What should annual accounts include?

This partly depends on whether your business is classed as dormant, a micro-entity, a small company, or a larger organisation.

Medium and large companies must deliver full annual accounts (sometimes known as “statutory accounts”) to HMRC and Companies House, and they should include:

• Profit and loss statement showing the company’s sales, running costs, and profit or loss over its financial year
• Directors’ report
• Balance sheet
• Name and signature of company director
• Notes about the accounts, such as the details of any advances, financial commitments, contingencies or guarantees
• An auditor’s report (unless the company is eligible for an exemption)

The requirements for filing annual accounts are slightly different for smaller and dormant businesses.
 

Company accounts for small and micro companies

It’s important to know the difference between small, micro, and dormant accounts so you know if your company falls into one of these categories and what type of accounts you need to file.

Small companies

Your business will be classed as a small company if it meets at least two of these criteria during the financial year:

• Fewer than 50 employees
• An annual turnover of no more than £10.2 million
• A balance sheet total less than £5.1 million

Small company accounts aren’t audited so you won’t need to include an auditor’s report.

Micro-entity accounts

Micro-entity accounts have even fewer requirements than small company accounts, and your business will be eligible if it meets at least two of these criteria:

• A maximum of 10 employees
• Annual turnover of no more than £632,000
• A balance sheet total under £316,000

Like small businesses, micro entities still need to send statutory accounts to HMRC and to company members, but won’t need to include a director’s report.

What about the Companies House reforms?

Companies House announced a series of reforms which mean small and micro-entities will soon need to submit Profit and Loss Statements as part of their accounts. The start date for this is not yet confirmed.

What about dormant company accounts?

Dormant companies are only expected to file dormant accounts containing a balance sheet and notes about the accounts. Nothing needs to be submitted to HMRC, but for Corporation Tax purposes they must tell HMRC that the company is inactive.

How and when do I submit my company accounts?

You’ll normally need to file your company accounts no later than 9 months from the end of your company’s financial year unless it’s your first set of accounts. The deadline to file first accounts with Companies House is 21 months after the date you incorporated the company.

 
You can normally file your accounts online, depending on what sort of business you operate and whether or not it needs an auditor.

 
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