Skip to content
Concise Accountancy

Concise Accountancy

Accountants and Registered Auditors

Menu
  • Home
  • About us
  • My account
  • Basket
  • Contact
  • Career
  • Blog

Small company accounts

Posted on 24th May 201918th February 2020 by conciseaccountancy

Every limited company may prepare and submit small company accounts with Companies House if your company meet the criteria of a small company according to special provisions in the Companies Act 2006 and the relevant regulations. This means you can choose to disclose less information in your company accounts compared to that of a medium-sized or a large company.

Criteria to qualify as a small company

To qualify your limited company must meet at least two of the following conditions:

After 01 Jan 2016Before 01 Jan 2016
TurnoverMust not exceed £10.2 millionMust not exceed £6.5 million
Balance sheet totalMust not be more than £5.1 millionMust not be more than £3.26 million
Average employeesNot more than 50Not more than 50

A company cannot prepare and submit small company accounts

Your company cannot prepare and submit small company accounts with Companies House if one of the following events has taken place. Your company are, or was at any time during the financial year:

  • A public limited company
  • A member of an ineligible group (see below)
  • An authorised insurance company, a banking company, an e-money issuer, a MiFID (i.e. Markets in Financial Instruments Directive) investment firm or a UCITS (ie Undertakings for Collective Investment in Transferable Securities) management company or carried on insurance market activity

A group is ineligible if any of its members is:

  • A public limited company.
  • A body corporate (other than a company) whose shares are admitted to trading on a regulated market in an EEA State.
  • A person (other than a small company) who has permission under Part IV of the Financial Services and Markets Act 2000 to carry on a regulated activity.
  • A small company that is an authorised insurance company, a banking company, an e-money issuer, a MiFID investment firm or a UCITS management company.
  • A person who carries on insurance market activity.

Above all, financial services companies are regulated by the Financial Conduct Authority.

Eligible to deliver small company accounts every year

Generally, your company is qualified to deliver small company account in the first accounting period if you fulfil the conditions in that period. In any subsequent periods, your company must fulfil the conditions in that period and the period before that.

On one hand, If your company qualified as small in one period no longer meets the criteria in the next period, you may continue to claim the exemptions available for the next period. If your company then reverts back to being small by meeting the criteria for the following period, the exemption will continue uninterrupted.

Conditions to qualify as a small group of companies

Basically your company must meet at least two of the following criteria:

After 01 Jan 2016Before 01 Jan 2016
Aggregate turnoverNot more than £10.2 millionNot more than £6.5 million
Aggregate balance sheet totalNot more than £5.1 millionNot more than £3.26 million
The aggregate average number of employeesNot more than 50Not more than 50

Contents of small company accounts

Generally, your small company accounts must include:

  • A profit and loss account.
  • A balance sheet, signed by a director on behalf of the board and the printed name of that director.
  • Disclosure notes to the accounts.
  • Group accounts (if a small parent company chooses to prepare them).
  • A directors’ report that shows the signature of a secretary or director and their printed name.
  • An auditors report that includes the printed name of the registered auditor unless your company qualifies for audit exemption.

Without reservation, your balance sheet must contain a statement in a prominent position above your director’s signature and printed name that your company accounts have been prepared in accordance with the special provisions applicable to companies subject to the small companies’ regime.

On the same note, your company do not have to deliver a copy of the directors’ report or the profit and loss account to Companies House. However, if you opt not to deliver the profit and loss account your company must state this fact on the balance sheet. Otherwise, you only deliver a signed balance sheet with disclosure notes to Companies House.

For further reading, the requirements for companies subject to the small companies’ regime are set out in Parts 15 and 16 of the Companies Act 2006.

Small company abridged accounts

The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 introduced the concept of abridged accounts.

Abridged accounts contain a balance sheet that contains a sub-set of the information that is included in a full balance sheet. Likewise, the profit and loss account may also contain a sub-set of the information that is included in a full profit and loss account.

Companies must now prepare and file the same set of accounts for its members as for the public record. This means that your company will decide at the point you are preparing your accounts whether or not to abridge them (or to prepare micro-entity accounts). Previously your company would prepare full accounts for your members and would then decide whether or not to abbreviate them for the public record.

If you opt to file an abridged balance sheet and/or profit & loss account then you must include a statement on the balance sheet that the members have agreed to the preparation of abridged accounts for this accounting period in accordance with section 444(2A).

Small companies preparing International Accounting Standards accounts must deliver a full balance sheet to Companies House.

Small company abbreviated accounts

The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 abolished abbreviated accounts. This means that abbreviated accounts cannot be prepared and filed with Companies House after 1 January 2016.

Other small company exemptions

The Companies Act 2006 and regulations also set out what the directors’ report of a small company must contain. Your director report does not have to contain a business review (or strategic report) or a statement as to the amount that your directors recommend being paid by way of dividend. If your company has taken advantage of the small companies’ exemption in preparing your directors’ report it must contain a statement above your director’s or secretary’s signature and printed name to that effect.

Your small company may also claim exemption from the audit. In this circumstance, you may submit unaudited company accounts.

Your small company which has chosen to not file your profit and loss account may also opt not to file a copy of your auditor’s report on your accounts. In this instance, you must make the following disclosures in the notes to your company accounts: your auditor’s name (if your auditor was a firm, the name of the senior statutory auditor), to state whether your auditor’s report was qualified or unqualified, and, if your audit report was qualified, what the qualification was.

Special rules for small groups

A parent company which qualifies as small need not prepare group accounts or submit them to Companies House if the group is small and not ineligible. If your small parent company decides to prepare group accounts your content is prescribed by the Companies Act 2006 and by Schedule 6 to the Small Companies and Groups (Accounts and Directors’) Report Regulations 2008.

If you prepare group accounts you must include a statement above the printed name and signature of your directors on the balance sheet, confirming that your accounts are prepared in accordance with the provisions applicable to companies subject to the small companies’ regime.

Another important document a limited company must take care of is the confirmation statement.

Share this:

  • Twitter
  • Facebook
  • WhatsApp
  • Skype
  • LinkedIn
  • Print

Like this:

Like Loading...
Posted in companies house administration, company accountsTagged company accounts, limited company account, limited company account for companies house, Small company accounts

Services

  • companies house confirmation statement Confirmation Statement
    Rated 5.00 out of 5
    £220.00
  • dormant company accounts Dormant account
    Rated 5.00 out of 5
    £250.00
  • Overseas Company registration
    Rated 5.00 out of 5
    £1,000.00

Categories

  • auditing
  • Brexit
  • British Embassies Worldwide
  • business finance
  • Business tax
  • Cash business
  • Climate change and eco friendly
  • Closing a limited company
  • companies house administration
  • company accounts
  • company dissolution
  • company flotation
  • Company names and incorporation
  • company re-registration
  • company restoration
  • company shares
  • confirmation statement
  • coronavirus news update
  • Corporate governance
  • Department for international trade offices
  • entrepreneurs mindset
  • EU countries
  • HMRC Compliance
  • Imports and exports business
  • latest news
  • Limited liability partnership (LLP)
  • Overseas company in the UK
  • Payroll and staff
  • Personal finance
  • Property tax
  • Public limited company (PLC)
  • setup limited company
  • Starting a business
  • statutory company registers
  • UK properties news
  • Useful UK Government contacts
  • VAT compliance
Privacy & Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
To find out more, including how to control cookies, see here: Cookie Policy

Concise Accountancy business opening hours

3rd Floor, 207 Regent Street, London W1B 3HH
+44 020 7692 4057
info@conciseaccountancy.com
Monday to Friday 9am - 6pm

Follow Us

  • Twitter
  • Facebook
  • Instagram
  • YouTube

Top Posts

  • AA02 to file dormant company account
  • Transfer property TR1 form
  • Variation of class rights
  • SIC codes for Financial and insurance businesses
  • Someone changed your registered office
  • SIC codes for Professional, scientific and technical businesses
  • UK SIC 2007
  • Get your company money back

Subscribe to our Blog

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Copyright © 2022 Concise Accountancy – OnePress theme by FameThemes
%d bloggers like this: