What are the statutory reporting requirements and deadlines for a UK Ltd company?
A full or micro-entity set of accounts must be filed at Companies House within nine months of the company’s year-end date.
A Corporation Tax return, Form CT600, must be submitted to the company’s local corporation tax office, along with a copy of the annual accounts, within twelve months of the company’s year-end date.
How do I determine the company’s year-end date?
This is always the last day of the month in which the company was incorporated. So, for a company incorporated on the 15th February, the company’s year-end date is set at 28th February.
What does an annual set of accounts comprise?
- Directors’ Report
- Profit and Loss Account
- Balance Sheet
- Notes to the Accounts; these disclose all details pertaining to the income, cost of sales and overheads of the company in the accounting period, as well as detail on loans, shareholdings etc.
- Balance Sheet
- Balance Sheet-relevant Notes to the Accounts
On what basis do I decide whether to file full or micro-entity accounts?
This is purely a matter for the directors’ discretion; there are no binding rules in favour of one form of disclosure or the other.
It may well be in the company’s current interest not to make full trading detail publicly available; however, the benefit of full disclosure lies in statutory authorities having comprehensive details of the company’s activities immediately to hand, lessening the likelihood of enquiries and investigations.
Can I choose to just file micro-entity accounts, without having a full set prepared?
No. A director must sign off a full set of accounts; only then can the micro-entity set be compiled and filed.
What is a company accounting period?
The period for which accounts will have to be made up and filed. This is an exact calendar year from the first day after the company’s year-end date; so, going by the above example, the company’s accounting period is 1st March to 28th February.
Is an independent audit compulsory for all UK Ltd companies?
No. For the UK tax year ending 5th April 2019, the year-end thresholds above which independent audit by a registered firm of auditors becomes compulsory are any two of the following:
- A Balance Sheet showing net assets in excess of 5.10 million GBP
- A Profit and Loss Account showing turnover in excess of 10.20 million GBP
- More than 50 employees
UK Company Limited By Guarantee
What is the difference between a standard Ltd company and a company limited by guarantee?
With a company limited by guarantee, all profits must be retained within the business; they cannot be distributed to directors or members in the form of drawings or dividends.
Also, the member’s exposure to any debts of the company on winding up is limited to the amount they agree to contribute as written down in the Memorandum of the company. The company is prohibited from issuing shares and thus creating shareholders.
Is the accounting treatment the same as for a standard Ltd company?
Yes; the balance sheet must show that any net profit from the profit and loss account has been retained within the business in the form of cash or purchase of assets; the profit and loss account must show all expenditure to have been restricted to non-remunerative, operational items.
Can a company limited by guarantee file micro-entity accounts?
Is a company limited by guarantee obliged to organize an independent audit?
No; however, given that the majority are set up for charitable purposes, or non-profit making enterprises such as property management, they invariably end up undergoing an external audit.
UK Charitable Company
Is an external audit compulsory for a company granted charitable status?
Is the accounting treatment different to a standard Ltd company or company limited by guarantee?
Yes, quite different; far more detail and transparency regarding the movement of funds is required.