What Are Company Accounts? Types, Thresholds and Deadlines
What company accounts include, the micro-entity and small company limits for 2026, and filing deadlines at Companies House.
Company accounts are the annual financial statements every UK limited company must prepare. They normally include a balance sheet, a profit and loss account and notes, and they are filed with Companies House and used to calculate Corporation Tax. Most small companies file accounts nine months after their year end.
This guide explains what company accounts contain, who has to file them, how company size affects what you file and how to read your own accounts. For deadlines and penalties, read our company accounts and filing deadlines guide, and for help preparing them see our limited company packages.
What do company accounts include?
- Balance sheet: a snapshot of what the company owns (assets), owes (liabilities) and the shareholders’ funds on the last day of the year.
- Profit and loss account: income, costs and profit or loss for the whole year.
- Notes to the accounts: accounting policies, details of fixed assets, loans, directors’ transactions and anything else needed to understand the figures.
- Directors’ report: required for some companies, including a summary of activities and directors’ names.
Who has to prepare and file accounts?
Every limited company must prepare annual accounts, even if it is dormant or has made no profit. Directors are legally responsible for filing them with Companies House, and the same figures feed into the company’s Corporation Tax return. Failing to file results in automatic penalties and can lead to the company being struck off the register.
Limited company accounts and tax from £249 + VAT.
See limited company packagesBook a free callCompany size and the type of accounts
| Size | Turnover | Balance sheet total | Employees |
|---|---|---|---|
| Micro-entity | Up to £1 million | Up to £500,000 | Up to 10 |
| Small | Up to £15 million | Up to £7.5 million | Up to 50 |
| Medium | Up to £54 million | Up to £27 million | Up to 250 |
A company must meet at least two of the three limits. Micro-entities can use a simplified format. Small companies usually do not need to be audited. Medium companies and above have more detailed reporting requirements. The thresholds above apply to accounting periods starting on or after 6 April 2025.
A simple example: a micro-entity balance sheet
| Item | Amount |
|---|---|
| Fixed assets (equipment) | £3,000 |
| Debtors (customers who owe money) | £8,000 |
| Cash at bank | £12,000 |
| Creditors (bills and tax due within a year) | £(9,000) |
| Net assets | £14,000 |
| Share capital | £100 |
| Retained profit | £13,900 |
| Shareholders’ funds | £14,000 |
The balance sheet always balances: net assets equal shareholders’ funds. If the company makes a profit and keeps it, retained profit rises and so do net assets.
Statutory accounts vs management accounts
Statutory accounts are the formal accounts you file, prepared under UK accounting rules. Management accounts are for you: monthly or quarterly reports that show how the business is doing, such as sales, costs, cash and profit by product or customer. Good bookkeeping supports both. Our bookkeeping services keep your records ready for year-end accounts.
What is public and what is private?
Accounts filed at Companies House are available to anyone, including competitors, customers and lenders. Micro-entities and small companies can file shorter accounts that reveal less. Your Corporation Tax computation and Self Assessment return remain private to HMRC.
How accountants prepare your accounts
- Check your bookkeeping and bank reconciliations.
- Record adjustments, such as depreciation, accruals, prepayments and stock.
- Prepare the balance sheet and profit and loss account.
- Calculate Corporation Tax and prepare the CT600.
- Agree the figures with you and file at Companies House and HMRC.
How to read your accounts: four useful checks
| Check | What it tells you |
|---|---|
| Gross margin | Sales less direct costs as a percentage of sales. Falling margins can signal pricing or cost problems |
| Net profit margin | Profit after all costs as a percentage of sales |
| Current ratio | Short-term assets divided by short-term liabilities. Below 1 can signal cash pressure |
| Debtor days | How long customers take to pay, on average |
Company accounts for London businesses
London companies often have larger premises, payroll and professional costs, and many deal with banks, investors or landlords who review their accounts. Accurate accounts help when you apply for finance, bid for contracts or sell the business. We prepare and file accounts for companies in every borough, including Ealing, Southwark and Barnet. See limited company accountants by borough.
Common mistakes with company accounts
- Filing late because the accounts deadline is earlier than the tax return deadline.
- Not reconciling the bank account throughout the year.
- Missing expenses or director loan entries.
- Treating personal spending as business costs.
- Not keeping records for at least six years.
Key accounting terms in plain English
| Term | Meaning |
|---|---|
| Turnover | Total sales for the year, excluding VAT |
| Cost of sales | Direct costs of producing what you sold, such as materials and subcontractors |
| Gross profit | Turnover less cost of sales |
| Overheads | Running costs such as rent, software, insurance and wages |
| Accruals | Costs or income that belong to the year but have not yet been paid or received |
| Prepayments | Costs paid in advance that belong to a future period |
| Depreciation | Spreading the cost of equipment over its useful life |
| Retained profit | Profit kept in the company after tax and dividends |
Why accounts matter beyond the deadline
Banks, landlords, suppliers and credit agencies often review filed accounts before agreeing finance, a lease or trade terms. A company with clear, up-to-date accounts is easier to lend to and easier to sell. Buyers want to see consistent profits, healthy cash and properly recorded director loans. Late or messy accounts create doubt and cost time and money to fix.
What happens if you file late?
Companies House charges automatic late filing penalties that increase the longer you delay, and directors can face further enforcement if they persistently fail to file. HMRC charges separate penalties and interest for a late CT600 and late payment of Corporation Tax. A late company can also have trouble opening bank accounts, obtaining credit or winning contracts. If you are behind, speak to an accountant straight away. Often accounts can be prepared quickly, and penalties can be limited by filing sooner.
Dormant company accounts
A dormant company has no significant accounting transactions in the year, but it still has to file annual accounts. Dormant accounts are much simpler and cheaper to prepare. See our dormant company accounts service, from £79 + VAT.
Five tips to make year end easier
- Reconcile your bank account every month, not once a year.
- Keep digital copies of invoices and receipts as you go.
- Record director loans and dividends promptly.
- Keep payroll, pension and VAT records in one place.
- Send your accountant a list of large purchases, new loans and contracts before the year end.
Frequently asked questions
Do all limited companies have to file accounts?
Yes. Even dormant companies must file accounts at Companies House each year.
When are company accounts due?
Nine months after the end of the financial year for private companies, and 21 months after incorporation for the first accounts.
What is the difference between statutory accounts and a tax return?
Statutory accounts go to Companies House and are public. The Corporation Tax return (CT600) goes to HMRC and is private.
Does a small company need an audit?
Most small companies are exempt from audit, but shareholders holding at least 10% can sometimes ask for one.
How much does it cost to prepare company accounts?
Our fixed fees start at £249 + VAT for turnover up to £10,000.
Fixed fees, paid online. Call 020 3441 1258 or get your quote now.
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