FZCO Accountants aim to prepare your annual accounts to comply with all the relevant statutory requirements. It will submit to the relevant tax authorities within the time limit. We offer statutory accounts preparation services for limited companies, LLPs, partnerships, and sole traders. We provide account preparation services for a wide range of clients across different industry and professions.
Statutory accounts – What are statutory accounts?
Statutory accounts also known as annual accounts are a set of financial reports prepare at the end of each financial year. In the UK, all private limited companies are require to prepare statutory accounts.
Statutory report contain with the financial activity and performance of a limited company. Annual accounts can also use to work out corporation tax.
Copies of statutory accounts should always be sent to:
- Companies House
- HM Revenue and Customs (HMRC)
- Anyone who attends the company’s general meetings.
How do I prepare statutory accounts?
When preparing statutory accounts, you must make sure that your accounts meet either the IFRS Standards or the New UK GAAP. The regulatory framework regarding accounts preparation has gone through a lot of change over recent years and is continuing to do so. With International Financial Reporting Standards (IFRS), FRS 102, and the Financial Reporting Standard for Micro-Entities (FRS 105), keeping up to date has never been more complex and time consuming.
For all limited companies, annual accounts must include:
- A balance sheet – a financial statement which shows how much the company owns, owes or is owed at the end of the financial year. This must be signed by a director and include a director’s name.
- A profit and loss statement – also known as a profit and loss account or a P&L account, this shows the business’s net profit or loss.
- Notes about the accounts.
Depending on the size of your company, you can also need to include:
- A directors’ report
- An auditor’s report
Statutory accounts for small businesses
Some companies do not need to file full statutory accounts and may not require to supply certain reports. Three types of businesses are subject to different rules, when it comes to annual accounts: small companies, micro-entities, and dormant companies.
Small companies and annual accounts
Your company is consider ‘small’ if it has at least two of the following:
- A turnover of less then £10.2 million
- £5.1 million or less on then balance sheet
- 50 employees or less.
Small companies can send ‘abridged’ account accounts to Companies House. Abridged accounts contain a simpler balance sheet and make less information about your company publicly available.
Small companies can also choose whether to send a directors’ report and a profit and loss account, and whether they want to audit.
Micro-entities and annual accounts
Very small companies are consider micro entities. To be considered a micro entity, your company must meet at least two of the following criteria:
- A turnover of less than £632,000
- £316,000 or less on the balance sheet
- 10 employees or less.
If your company is classifies as micro-entity. You can prepare simpler statutory accounts and send your balance sheet to Companies House with less information. The exemptions which apply to small companies also apply to micro entities.
Dormant companies and annual accounts
Companies House considers a company limited as a dormant if it hasn’t had any ‘significant’ transactions over the last financial year. Significant transactions are financial transactions that usually need to report. This doesn’t include any fees paid to Companies House, penalties for filing accounts late, money paid for shares.
If your business is consider dormant and ‘small’. You do not need to audit or submit an auditor’s report.
Statutory accounts and FZCO Accountants
Creating financial statements is a key part of running a business. With FZCO Accountants accounting and invoicing software you can get an instant overview of your company’s financial health with automatic VAT Reports, balance sheets and profit and loss statements.