All limited companies have to file annual accounts with Companies House every year. These go onto the public record and are available to anyone who wants to look at them. Creating and filing the full set of accounts for Companies House can be quite a time consuming and expensive business. It will normally include using the services of an accountant and have the company’s accounts fully audited as well as doing full stock takes.
Small Company Accounts
For a number of years it has been possible for smaller companies to file a simplified version of their annual accounts. Preparation of the simplified accounts does not normally require an independent auditor and in many cases small business owners can do much of the preparation work themselves, greatly reducing the cost. To qualify for these simplified accounts a small company must meet at least two of the following conditions:
- Balance sheet less than £3.26 million
- Net turnover less than £6.5 million
- Average number of employees 50 (or fewer)
Micro Entity Accounts
The new, even more reduced accounts, are for micro entities. These are defined as meeting two of the three following criteria:
- Balance sheet total less than: £316,000
- Net turnover less than: £632,000
- Average number of employees 10 (or fewer)
The differences between the two sets of accounts are:
|Small Business Accounts||Micro Entity Accounts|
|a balance sheet||Compulsory||Compulsory|
|a profit and loss account||Compulsory||Optional|
|notes to the accounts||Compulsory||Optional|
|a directors’ report||Compulsory||Optional|
|an auditors report||Optional||Optional|
So in the simplest form all a Micro Entity will have to file is a balance sheet showing their position on the last day of the year. For most businesses this can be generated from their bookkeeping software and may enable them to complete the whole process without having to pay an accountant.
If you want to find out more about submitting your accounts to Companies House, or need help doing it, give our Business Consultants a call on 0800 0828 727.