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How and when to file annual company accounts

15 December 2021 / Insight posted in Technical guidance

Having just filed your latest set of accounts at Companies House, the idea of looking at your finances again may make you groan. With almost another year to file your accounts, considering this period’s financial statements may feel like overkill. However, allocating some time to stay on top of finances, including business and corporate tax, could save a significant amount of time and stress for you and your finance team overall.

When are company accounts due?

Limited companies are legally required to complete annual accounts or end of tax year reports. Depending on specific qualifiers, such as company size, these accounts may need to include the company’s profit and loss statement, balance sheet, notes on the account, an auditor’s reporting statement, a director’s report and the name and signature of other directors at the company.

Companies House will create a financial year-end for limited companies when you incorporate. This is the last day of the month in which your company was registered with Companies House. Filing for annual accounts is 9 months after the end of the account period, minus the first year.

Filing company accounts

For a company that is not in its first year of trading, your company’s size is determined by the number of employees and the financial results in this and the prior period. Changing size leads to challenges when it has not been considered by the directors. Have you considered what size your business was last year, whether you were in the period of grace and what your projected company size will be this year?

The company size thresholds apply to most stand-alone companies. Your company’s size is based on meeting two of the three thresholds in this and the prior period. If your business met two of the small thresholds for the last financial period but will exceed two of the thresholds in this period, this is your period of grace, the business will still be classified as small. With continued growth in the next accounting period, it will be classified as medium-sized. Note, the two-year rule takes into account one-off transactions and events.

Company size thresholds for year end accounts

Company accounts for medium-size businesses

Your company’s size dictates the minimum level of disclosure within your financial statements as well as the need to have an audit. Being a medium-sized business means:

You must appoint auditors. If your business has stock/inventory, appointing auditors prior to the end of the financial year will enable them to attend your stock take and could help prevent a qualified audit report for this and the subsequent reporting period.
The financial statements will have to include a strategic report and a full directors’ report.
A cash flow statement and statement of changes in equity will be included as primary statements in the accounts.
You will need to include notes providing information on your business’ profit and loss.
You will not be able to file filleted accounts at Companies House.

Narrative reporting requirements expand further when your business reclassifies from medium-sized to large.

Company accounts for large businesses

Submitting company accounts as a large business means you are required to:

Include non-financial key performance indicators in your strategic report.
Disclose to your stakeholders how you have performed your duties as directors by completing section 172(1) reporting.
Explain in the directors’ report how you manage relationships with employees, suppliers and others, if these do not form part of your section 172 reporting.
Include a streamlined energy and carbon report, explaining your business’ energy consumption and emissions, and what your business is doing to become more energy efficient.

Identifying the potential changes to your accounts in good time will help ensure that the chart of accounts within your accounting system captures the required additional supporting information. Obtaining additional assistance is easier and often less expensive if done several months before your filing deadline.

If you have any questions or would like to discuss the implications of changing size further, please contact us below or visit our Corporate Audit page for further information.