Preparing ‘statutory accounts’ for a private limited company is the annual practice used to report business activities in the preceding year.
Information used to prepare annual accounts at the end of the company’s financial year comes from the company and accounting records. You must send out copies of the company statutory accounts to:
- Anyone with shares in the company (i.e. the shareholders)
- Anyone who can attend general meetings of the company
- Companies House
- HM Revenue and Customs (HMRC) as part of the Company Tax Return
Note: There are different deadlines for filing at Companies House and with HM Revenue and Customs. But, in some case you will be able send them both at the same time.
How to Prepare Statutory Accounts UK
When you prepare annual accounting report for a private limited company, the statutory accounts must include:
- A ‘balance sheet’ based on values derived on the last day of the financial year. Balance sheets must show the value of everything that the company owns (e.g. its assets), how much it owes, and the amount owed to the business.
- A ‘profit and loss account’. It must show company sales, running costs, and either the profit or the loss that it made during its financial year.
- Notes about the accounts.
- A director’s report. Some exceptions apply for ‘micro-entities’ (see below).
Depending on the size of the company you may need to include an auditor’s report. Check if the audit exemption for private limited companies would exclude your business. A balance sheet must contain the name of a director printed on it and one of the directors must sign it.
United Kingdom Accounting Standards
The Financial Reporting Council (FRC) governs the regulation of financial reporting in the United Kingdom. To meet their standards, all statutory accounts must comply with (either):
- International Financial Reporting Standards
- New UK Generally Accepted Accounting Practice
Note: An accountant or a tax adviser can provide further information on accounting standards in United Kingdom. You can also get help and advice on tax if you do not understand something.
Making Corrections and Amendments
Amended or corrected accounts must relate to the same period as the original accounts. You would need to send any amended accounts on paper to your nearest Companies House office.
Make it clear that they are the new version of amended or corrected annual accounts and:
- The new version replaces the original accounts.
- They have now become your statutory accounts.
- You prepared them as they were at the date of the original accounts.
Write the word ‘amended’ on the front to let Companies House know the accounts are not duplicates. Even so, they will still keep the original accounts on file.
Note: You can amend only one part of the accounts. If so, send a note stating which part you changed. A director must sign the note and file it with a copy of the original accounts.
ALSO IN THIS SECTION
Dormant and Small Companies
Some businesses can avoid being audited and send simpler annual accounts to Companies House. Check out how micro-entities, small and dormant companies may qualify.
Penalties for Late Filing
There are financial penalties for failing to file accounts with Companies House by the deadline. Find out how much you would need to pay and how to appeal against annual accounts late filing penalty.
Note: Businesses will get an extra three (3) months to file accounts with Companies House in an effort to help companies avoid penalties as they deal with the impact of the coronavirus disease (COVID-19).