Company accounts for UK public companies after Brexit

There are new accounting rules after Brexit when comes to prepare company accounts for UK public companies both with listing in the UK and in the EU. These rules apply from 01 January 2021 onward.

Generally, your company must adopt the UK adopted IAS for the accounting period beginning on or after 1 January 2021. You would say goodbye to the EU adopted IAS. IAS stands for International Accounting Standards. Both sets of accounting standards are the same at the moment. However, there may be differences later when UK updated the UK adopted IAS.

UK public companies with a UK listing

All UK public companies and groups with shares listed in the London Stock Exchange must prepare accounts using the UK adopted IAS. This rule applies to your company accounts with the accounting period starting on or after 01 January 2021.

However, you have the option to prepare your company accounts using the EU adopted IAS if you wish. This option only available to you for accounts beginning on or before 01 January 2021.

If you are going to use the EU adopted IAS for your accounts then change over to the UK adopted IAS, in this case, you do not have to restate your accounts after 01 January 2021.

UK companies with an EEA listing

If your public limited company has a subsidiary incorporated in the EU with an EEA listing, you must ensure you do both of the following:

First, you must comply with the rules of the country where your subsidiary is located.

Second, you must produce company accounts that comply with the UK Companies Act 2006.

If you have any questions about company accounts for UK public companies after Brexit, contact Companies House. Alternatively, speak with our London accountants.

Another important document, your public limited company must deliver to Companies House is your confirmation statement.

Cash handling

Business to have a cash handling policy for efficient cash management and to prevent fraud.

It is a good idea for your business to draw up internal control procedures for your staff who handle your business cash and monies matters in your business premises.

Generally, the cash handling procedures shall consider covering the following.

Bank Deposits

Firstly, when paying a cheque or cash into a bank account, a deposit or paying in slip must be completed. Deposits can be made in person, by mail, or an automated teller machine (ATM). Cash should not be made by mail.

Receipts From Customers

Secondly, you must update Cashbook, individual customer’s ledgers and trade debtors control accounts to keep track of your customers’ outstanding balances.

At the same time, send reminders to follow up on outstanding sales invoices. Document the payment methods your customers used to settle their invoices. For example, cash or cheque or by bank transfer or combination of the three.

For high volume transactions business, it is advisable to maintain your accounting records using well-known bookkeeping software like Clearbooks, Xero, Sage or Quickbooks. As this will cut down the administrative burden and fewer errors.

Issue cheque

On the other hand, the cheque must be signed by authorized signatory only and approval must be obtained for payment.

Ideally, the person authorizing the invoice for payment should not be the same person signing the cheques.

There are computer software packages available that write cheques and reconcile a bank amount automatically. Using computer software is the quickest and accurate way of writing cheques. The computer prints the cheques and records the payments for accounting purposes.

Regularly, prepare bank reconciliations. The use of computer-prepared cheques simplified the bookkeeping process.

Paying Bills Electronically

Another way to pay Bills is by electronically as an alternative to writing cheques. This has become increasingly popular and convenient.

There are different types of electronic payments:

  • Paying Online,
  • BACS payment,
  • Electronic Fund Transfer,
  • Standing Order,
  • Direct Debits,
  • Bank transfers,
  • Telegraphic transfer

These facilities have made global trading possible.

For instance, you may pay your staff directly by deposit salary to their bank accounts. You may electronically send PAYE and NIC to the HMRC. Besides, you also pay Companies House for your confirmation statement fee online.

Besides, Handling cash electronically also enable monies available sooner between banks and there is less chance of fraud.

Security is extremely important when paying bills online. Passwords and identification numbers are key to your company’s bank account. For this reason, they should never be left where unauthorized staff or the public can see them.

However, it is still a best practice to perform an accuracy check by reviewing the payments made electronically on a regular basis.

Bank Accounts Reconciliation

Doing bank reconciliation frequently is compulsory to ensure there are sufficient funds in your bank accounts to fund the payments made electronically. This includes direct debits, cheques issued, standing order and BACS payments.

Likewise, you must also update the suppliers’ accounts frequently to ensure no overdue payments. Keep an eye on any discounts offered by the suppliers for early payments. Because this provides further savings for your business if there is sufficient cash in the bank and payment can be made.

Petty Cash

Normally, petty cash is for paying small items, ad-hoc expenses, stationery, taxi fares, and for reimbursement of staff expenses.

You can usually set a maximum amount for withdrawals from the petty cash fund. For example, for expenses claimed up to £200 will be reimbursed from the petty cash.

Correspondingly, the person claiming petty cash must sign the petty cash voucher. Attached the expenses receipts to the petty cash voucher.

On the other hand, an effective cash handling procedure gives confidence to your Auditor that your accounting system is reliable and your company accounts give a true and fair view.

How to request authentication code

How to request your company’s authentication code from Companies House is easy.

The authentication code is a 6 character password made up of the combination of alphabets and numbers. The code is the equivalent of your company’s director or company secretary’s signature and it is linked to your company’s number. Please keep safe of the code.

You would require your authentication code to file your confirmation statement and company accounts using the web filing service.

Forgot your authentication code

Forgotten your code? not to worry because you can request Companies House to re-send your authentication code to your company’s registered office address.

Companies House would only send your authentication code to your registered office address. They would not send your code to anywhere else no matter how hard you beg them to because the company law says so and they follow the company law.

How to request

  1. Sign in to Companies House web filing.
  2. Enter the email address and your password you registered for web filing service.
  3. Then, you will be directed to the sign in to a company page.
  4. You will see the link “request an authentication code” above the sign-in blue button. Click on it.
  5. You will be directed to Request an authentication code page.
  6. Step 1: Select where your company was incorporated. Enter your company number then click the continue button.
  7. Step 2: Review your company information displayed to make sure it is correct. Your company registered office will be displayed there. if it is correct then you click on the request code button.

How long does it take to arrive

It takes about 5 working days to reach your registered office address. If you did not receive the code after 5 working days, contact Companies House or contact us.

No access to your registered office

No access to your mails sent to your registered office address? Then you must change your registered office address immediately.

In this circumstance, you must file a Companies House form AD01 to change of your registered office address on paper. Then wait for the Registrar of Companies to approve and publish your new registered office address on the public record after that you sign in to Companies House’s web filing service to request your authentication code again. Follow the same steps above. This is a lengthy process.

Companies House propose to strike off

Companies House is proposing to strike off your company in this situation it is critical for you to avoid the dissolution and get your authentication code promptly before it happens.

Contact Companies House to explain your registered office situation in writing. Companies House would reply to you to say if they approve your request whether they have discontinued the proposal to strike off. They would specify the date your overdue company’s confirmation statement or company accounts must reach them.

Companies House would issue prosecution notice to your company directors if your company’s documents still not filed after the specified date.

Change registered office and get authentication code at the same time.

There is a way to change your registered office address and get your authentication code at the same time. Our accountants can help you.

Companies House has the discretion to allow this on a case by case basis. We will write to Companies House on your behalf to explain your situation together with supporting evidence and prepare the required documents and Companies House form for your director’s signature. You are to send the signed documents back to us then we will take care of Companies House administration for you from there.

Your company dissolved while waiting for authentication code arrived

It is possible for your company to be struck off while you are waiting for your authentication code to arrive. You can avoid this by writing to Companies House as discussed above.

Companies House would dissolve your company without hesitation if you do not communicate with them of your intention to keep your company.

Once your company is dissolved, you can restore your company through administrative restoration. You must apply to Companies House for this.

Administrative restoration

Application for administrative restoration with Companies House is straight forward. Companies House would require you to bring your company’s filings up to date. This includes your company accounts and your confirmation statement.

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