All companies must keep accounting records and annual accounts
must be sent to the Registrar. The period reported on in the
accounts is called the financial year.
What Period Should the
A company's first accounts should cover the period starting
from the date of incorporation and ending on the accounting
reference date, or up to 7 days either side of that date.
Subsequent accounts should start on the day after the end
of the period covered by the previous accounts and end on
the accounting reference date or up to 7 days either side
of that date.
What is the Accounting
A new company's initial accounting reference date will be
the last day of the month in which the anniversary of incorporation
However, a company can choose its own accounting reference
date by filing Form AA01 to the Registrar, either during
the accounting year in question or during the period allowed
for delivering accounts to the Registrar. A company can
shorten an accounting period as often as it chooses. But,
it cannot extend an accounting period within five years
of the end of a period it has previously extended except
in very limited circumstances. An accounting period cannot
be extended to last more than 18 months unless the company
is subject to an administration order.
When Must Accounts be Delivered
to the Registrar?
Private companies have nine months from the end of the accounting
period to deliver their accounts to the Registrar.
Where there is a special reason for doing so (e.g. an unforeseen
event which is outside the control of the company and its
auditors), the Secretary of State for Trade and Industry
may extend the time for laying and delivering the accounts.
This cannot be done if the period normally allowed for delivery
of accounts has already passed. The application for the
extension, which should be made to the Registrar, must contain
full reasons for the need for the extension and an indication
of how much additional time is being applied for.
A company with overseas interests can claim a three month
extension to the time limit by delivering Form 244 to the
Registrar before the end of the normal period for delivering
What if the Accounts are
There is an automatic penalty for late delivery of £150
for up to 1 months delay; £375 for 1-3 months; £750 for
3-6 months; and £1500 for over 6 months.
Failing to deliver the accounts on time is also a criminal
offence for which the directors may be prosecuted.
What Must the Accounts
Small companies may deliver abbreviated accounts to the
Registrar. A "small" company is defined as one which meets
at least two out of three of the following conditions with
effect from 6th April 2008:
§ Annual turnover not more that £6,500,000
§ Balance sheet total (i.e. total fixed and current assets)
not more than £3,260,000
§ Average number of employees not more than 50.
The format of the accounts must follow that laid down in
the Companies Act. The provisions relating to small companies
are in Part 15 of the Companies Act 2006.
As a minimum, accounts for a small company must include
an abbreviated balance sheet and notes. The balance sheet
must contain a statement (in the required format) that the
accounts are prepared in accordance with the special provisions
in Part 15 of the Companies Act 2006 relating to small companies.
Do the Accounts Have to
If the company's annual turnover is not more than £ 6.5M
and the balance sheet total is not more than £3.26million
then the company accounts do not have to be audited. However
if the turnover is more than £ 6.5M an audit is required.
Who Can Approve and Sign
The accounts must be approved by the company's Board of
Directors and signed by a director on behalf of the Board.
The directors' report, if required, should be signed by
a director or the secretary.
You do not have to lay the accounts before a general meeting,
or get them agreed by the Inland Revenue, before sending
them to the Registrar.