Want to know what are statutory accounts? Who needs them? What is included in statutory accounts? When to file them? Do small businesses need to file them? Can you prepare them by yourself and so on. Read on this post till the end to get all your answers.
What are Statutory Accounts?
Statutory accounts are also referred to as annual accounts or year-end accounts. These are the set of financial reports that are prepared at the end of the financial year. They provide a snapshot of the financial performance and activities of a business in an accounting year. Moreover, they are also used to calculate the corporation tax.
Who Needs to Submit Statutory Accounts?
In the UK, all private and public limited companies and limited liability partnership companies are required to prepare these accounts annually. You need to know that these accounts are only required for limited companies, not for sole traders.
Directors need to ensure that these accounts are submitted accurately within the deadline. Many company owners and directors prefer to get the help of an accountant for accuracy and to comply with the legal standards.
What is Included in Statutory Accounts?
These accounts include:
- A Balance Sheet – It is a financial statement that shows the value of everything that a company owns and is liable to pay
- Profit and Loss Statement – This statement shows the company’s net profit and loss, running cost and the sales of the business
- Cash Flow Statement – It shows where the money comes in and how much goes out of a business
- Notes about the account
Depending on the company’s size, statutory accounts also include:
- A directors’ report
- An auditor’s report
Statutory Accounts: Small Businesses
Generally, small businesses don’t need to file full statutory accounts and are free to provide certain reports. Different rules are applied to different businesses types including small companies, dormant companies, and micro-entities.
A company is considered small if falls under two of the following points:
- A turnover below £10.2 million
- £5.1 million or less on then the balance sheet
- 50 employees or less
They can send abridged accounts with a simple balance sheet.
Companies that are very small are known as micro-entities. Your company is considered a micro-entity if it fulfils at least two of the below points:
- A turnover below £632,000
- Balance of £316,000 or below on balance sheet
- 10 employees or less.
Micro entities have to send simpler statutory accounts with minor information.
If a company doesn’t have a significant transaction over a financial year, it is considered dormant. Significant transactions are those transactions that need to be reported. It doesn’t include penalties, money paid for shares, and fees paid to Companies Houses.
Looking for a professional accountant to prepare and file your company accounts? Reach out today!
How to File Company Accounts?
You can file your company accounts by using different software. You can also take advantage of the Company Accounts and Tax Online service that allows you to submit data both on HMRC and Companies House at the same time.
In addition, you can also send them via post but it takes more time to process. If you are sending a company tax return, you can file them online.
When to File your Company Accounts?
You need to file your statutory accounts by meeting the deadlines of Companies House and HMRC. The deadlines to file your company accounts are:
- If you’re filing first accounts with Companies House, you must file them within 21 months after the date of registration with Companies House
- If you want to file annual accounts with Companies House, you must file them within 9 months after the end of the financial year of your company
- If you want to file a company tax return, you must file them within 12 months after the end of your accounting period for Corporation Tax
You have to pay penalties for filing late with HMRC and Companies House.
Can I Prepare my Statutory Accounts?
You can do it but it’s not that easy if you don’t have a financial background. Taking the services of an accountant is worth your time and money to meet all the legal requirements and save from penalties. Keep in mind that the account you file will be available publically, so it is important that they are accurately filed as directors would be held responsible for any mistake.
Need an Accountant to Prepare Statutory Accounts?
So, after reading this short post you have understood what are statutory accounts, who needs them, what is included in statutory accounts, and when to file them. Now you know that preparing and filing statutory accounts can be a complex and time-consuming process and a mistake can lead to hefty penalties. Therefore, it is better to hire an accountant to do the job on your behalf.
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Disclaimer: This blog provides basic information on statutory accounts.