Company Accounts – What They Include, Deadlines and Penalties
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If you own or run a business, you must prepare company accounts at the end of every financial year. Your company financial year does not have to coincide with the tax year (April to March). A copy of the company accounts must be sent to shareholders, Companies House, HMRC, and anyone who attends your company’s AGM.
The main purpose of the company accounts is to establish the financial position of the company and to calculate the amount of corporation tax that is due to HMRC.
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As a director of the company, it is your responsibility to ensure that the company accounts are accurate and submitted by the required deadline. Even if you employ an accountant to prepare and submit your accounts, the onus is on you to ensure that this is done correctly.
What Do Company Accounts Include?
The company accounts should include the following:
- A Balance Sheet – this is a report that shows a list of all assets and liabilities
- A Profit and Loss Account – this report shows all the money earned and spent by the business in the financial year.
- Notes about the accounts
- A directors’ report – unless the company is classed as a micro-entity
- An auditor’s report – unless the company has an exemption
- The name and signatures of all company directors.
Deadlines for Company Accounts
Companies must file their first set of company accounts twenty-one months after the date the company was registered with Companies House. Subsequent accounts must be filed within nine months of each financial year end.
Any corporation tax due need to be paid nine months and one day after the financial year end. You must inform HMRC within this timeframe if your company does not have any corporation tax to pay.
Penalties for Late Filing
Failure to file company accounts with Companies House by the required deadline can lead to penalties. If your accounts are filed late, the following penalties will apply (at the time of this writing) for private limited companies (public limited companies have different penalties):
- Up to one month after deadline – £150
- One to three months after deadline – £375
- Three to six months after deadline – £750
- More than six months after deadline – £1,500.
If you file your company accounts late two years in a row, the above penalty amounts are doubled.
You are legally responsible for ensuring that accounts are completed and submitted by the deadline.