Running a successful company in the UK requires careful planning and organisation. Businesses need to manage their recruitment and staff, business strategy, marketing, finances, stock, product development, IT, and many other areas. They must also meet their statutory annual company filing requirements. Given the legal requirement to file certain documents each year with Companies House and HMRC, it is essential that enough time and resources be given to ensuring that these tasks are completed fully, accurately, and on time. But precisely what are the annual filing requirements for a company in the UK, what happens if they are not met, and what does each entail?
What are the main annual filing requirements for a UK based company?
There are three main annual filing requirements for a UK based company, as follows:
Annual Financial Accounts
All UK based companies are required to file annual financial accounts with Companies House and HMRC every year, even if they are dormant. It is important to note that not all companies need to prepare and file the same level of information in their annual accounts. The requirements vary depending upon the size of the company – i.e. whether it is a large, medium, small, or micro business, or whether it is dormant.
The main aim of preparing and filing annual accounts is to provide clear information on the company’s financial status within the given tax year, including the value of assets held, profit makes, the company’s cash position, and how much is owed to and by the business. Annual accounts should be prepared so that they align with the accounting reference date issued by Companies House when the company was formed. The accounting reference date is the period for which the company must prepare its statutory accounts in accordance with the Companies Act 2006. Annual accounts must be filed within nine months of the accounting reference date to avoid potential penalties or other sanctions.
The rules state that company accounts must generally 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.
- notes to the accounts.
- group accounts (if applicable).
The rules also state that accounts must generally be accompanied by:
- a directors’ report signed by a secretary or director and their printed name. If the company does not meet the criteria as a small entity, a business review (or strategic report) should also be included.
- an auditors’ report with the name of the auditor, and be signed and dated by them (this does not apply if the company is exempt from auditing).
Small and micro-entity companies do not need to prepare the same level of information that is required of medium and large businesses. Instead, they can prepare and file a shortened (abridged) version of their financial accounts, requiring fewer details.
Micro and small company annual accounts requirements
Small companies must still file a profit and loss account, balance sheets, notes to the account, and group accounts (if applicable). These must be accompanied by a director’s report. Small companies are generally exempt from any auditing requirements and only need to file an abridged balance sheet and profit and loss account, both of which contain a subset of financial details.
A small company is one that meets two or more of the following criteria:
- an annual turnover of no more than £10.2 million.
- a balance sheet total of no more than £5.1 million.
- an average number of employees of no more than 50.
Micro-businesses only have to file micro-entity accounts which require less information than is required for small, medium, and large companies. They can also apply for exemption from filing an auditor’s report, a director’s report and profit and loss accounts with Companies House.
A micro-entity company is one that meets two or more of the following criteria:
- an annual turnover of not more than £632,000.
- a balance sheet of no more than £316,000.
- an average number of employees of no more than ten.
Certain companies are not eligible to become micro-entities, however, including:
- a limited partnership.
- a qualifying partnership (as defined under the Partnership (Accounts) Regulations 2008).
- a public limited company.
- an overseas company.
- an unregistered company.
- a company authorised to register under section 1040 of the Companies Act 2006.
- a charitable company.
- a company excluded under section 384 or 384B of the Companies Act 2006.
Dormant company annual accounts requirements
All companies registered in the UK are required to file accounts, even if dormant. Dormant companies do not need to submit a profit and loss account or directors’ report to Companies House, nor do they need to file accounts with HMRC. They do need to file a balance sheet with Companies House, however, and these are much simpler than for an actively trading company.
Annual Confirmation Statement
All companies registered in the UK, whether currently active or dormant, are required to file a Confirmation Statement with Companies House at least once a year. Confirmation statements are the main way by which Companies House ensure that the information they hold on companies in the UK is always kept up to date. Where appropriate, companies can file a confirmation statement more often than annually. Confirmation statements are completed online using form CS01 and must contain any changes to:
- Details of directors and secretary.
- Details of those with significant control (PSC) of the company.
- The company’s registered office address.
In addition, any changes to the following can be updated in your company’s confirmation statement:
- Standard Industrial Classification (SIC) code.
- Statement of capital.
- Trading status of shares (i.e. who holds shares and how many are held).
- Exemption from keeping a PSC register.
- Shareholder information.
Even if nothing has changed in relation to the above, a confirmation statement must still be filed since this tells Companies House that the information they currently hold is correct. The 12 month period starts from either your date of company incorporation or when you filed your last confirmation statement.
Annual Corporation Tax Return
All actively trading companies registered in the UK must file a company tax return with HMRC on an annual basis (dormant companies are exempt). Businesses have three months to register with HMRC, advising them they are actively trading and hence liable for company taxation. Companies must file a CT600 form (Corporation Tax for Company Tax Return) providing details on income, chargeable gains, profits, deductions and tax reliefs/credits, and how much corporation tax is owed on the profit made for the tax accounting period (i.e. the tax year).
The CT600 must be filed within 12 months of the end of the company’s accounting period that it covers. A penalty for late filing may be charged if this deadline is missed.
Because a CT600 can only cover a period of no more than one year, some companies with financial periods of longer than 12 months may need to file two tax returns; one for the 12 month period and one for any period of time over the 12 months.
It is also important to note that even though the deadline to file a CT600 is 12 months after the date the accounting period ends, the tax owed must be paid within nine months of this date.
Other company filing requirements
In addition to the annual filing requirements outlined above, registered companies in the UK have other obligations which may be required at various points through the accounting year. These include:
- Making VAT returns to HMRC –– Any company with a turnover in excess of £85,000 (referred to as the VAT threshold) in any 12 month period must register for and pay VAT. The VAT threshold can change at any time. VAT returns are typically prepared and filed with HMRC each quarter, and the amount owed is paid by the 7th day of the second month after the VAT quarter ends. Hence, if you file a VAT return for January to March, then the VAT must be paid to HMRC by 7th April.
- PAYE Returns – Any company paying staff must register for the Pay As You Earn (PAYE) scheme with HMRC. Payroll and tax information is provided to HMRC using the online Real-Time Information service.
- Event-driven filings – On an ‘as and when’ basis, changes to the company must be filed with Companies House, including:
- Changes to the company name and/or registered address.
- Changes in Persons with Significant Control (PSC) Changes to directors and company secretaries – or to the details of existing individuals.
- Changes to the company’s articles of association.
- Changes in shareholding or share structure.
- Change to the company’s accounting reference date.
All owners and directors of companies in the UK, whether it is active or dormant, must adhere to their obligations and duties, including filing requirements, as laid out in the Companies Act 2006. Failure to do so may be an offence under the 2006 Act and may lead to substantial fines or other adverse action. By putting in place people, systems and processes to ensure that every filing requirement is adhered to in full and on time, directors and company owners can mitigate the potential for any sanctions and penalties and further future scrutiny by Companies House and HMRC.
Uniwide Formations Ltd specialises in the registration of limited companies and LLPs. As professional business service providers, we offer a wide range of related services and can advise you on all aspects of your annual filing requirements. You are most welcome to contact us to discuss any of the points raised in this article.