Annual Accounts
All limited companies must prepare a set of annual accounts each year to submit to Companies House. The accounts report on the performance and activities of the company during that year. Small to medium sized companies and dormant companies can file abbreviated accounts if they are eligible, but accounts must be filed nonetheless.
The annual accounts cover the period of the company’s financial year which begins either on the anniversary of the company’s incorporation or the day after the previous financial year.
The company director is responsible for ensuring the annual accounts are submitted on time to Companies House. If the accounts are delivered late then there is an automatic civil penalty. The penalty fees depend on how late the accounts arrive at Companies House and whether the company is public or private, with public companies paying a higher fee.
As a general rule, all annual accounts include a profit and loss account, a balance sheet, an auditors’ report and a director’s report.
• Profit and Loss – this shows the trading performance over the 12 month accounting period. It only summarises sales, costs and expenses etc.
• Balance sheet – this outlines the company’s financial position at the company’s year end.
• Directors report – this is a brief report giving the directors view of the firm’s performance and prospects.
• Auditors’ report – a brief report by the auditor, if appropriate, for the company.
The size of the company will determine how detailed the annual accounts have to be. Large public companies require more detailed accounts than smaller private companies.
A company that has less than £2.8 million in turnover or have less than 50 employees are classed as small companies. These companies only have to file abbreviated annual accounts and this does not have to include profit and loss.
Medium sized companies are those that have an annual turnover of £11.2 million or less. These companies have to file a full balance sheet to Companies House with abbreviated profit and loss figures. Large companies have to disclose everything
The accounts must be approved by the company’s board of directors and signed before they are sent to Companies House. The time allowed for delivering annual accounts to Companies House is 10 months from the financial year end for private companies and 7 months for public companies.
Financial information from the annual accounts is analysed and forms the basis of the financial data contained in checkSURE’s full credit reports. After a new set of accounts is analysed it is incorporated into the report to provide a glimpse of the company’s financial status. These reports are available to buy for £9.95.
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