5 tips for filing your statutory accounts on time

What are statutory accounts?

Statutory accounts, also referred to as annual accounts, are financial reports that private limited and public companies must prepare at the end of each financial year. These records are extremely useful for providing an overview on a company's financial health; they can uncover warning signs to potential financial trouble ahead, as well as highlighting efficiencies and success.

Filing statutory accounts is a legal requirement, but it can be an extremely daunting task. Here, we’ll share our tips to help you file your statutory accounts on time, as well as providing a handy a statutory accounts preparation checklist. But first, let’s recap what should be included in your statutory accounts.

What should be included in your statutory accounts?

For a limited company in the UK, statutory accounts should typically include the following:

• A balance sheet

• Profit and loss account

• Notes about the accounts

A balance sheet shows the value of everything your company owns, in addition to what it owes on the last day of the financial year. A profit and loss account includes your company’s income, costs, and resulting profit or loss over the financial year.

Notes about the accounts offer more information on who money is owed to and what kind of payments they are, such as one-off or recurring payments. This provides more context to the accounts. Depending on your company’s size and eligibility for exemptions, you may also need to include a director’s report and, where required, an auditor’s report.

A director’s report summarises the company’s prospects and any dividends that possibly will be paid to shareholders, as well as the names of directors, business activities, and events that can be seen on the balance sheet. Larger companies are also likely to use the director’s report as an opportunity to recap the past year and detail the company’s financial performance, while looking ahead to the next financial year.

Tip 1: Start preparing your statutory accounts early 

It’s best to start preparing your statutory accounts early as the reports can be overwhelming to put together.

Statutory accounts must be prepared at the end of your financial year and submitted to Companies House. A version of your accounts is also filed with HMRC as part of your Company Tax Return (CT600), although the format and level of detail may differ. Copies must also be provided to shareholders. A copy of your statutory accounts also needs to be sent to every member of your company, and when you file it with Companies House, it will be available to the public.

Note: Your initial statutory accounts must be filed 21 months after registering with Companies House. Then, after that, you’ll file nine months after your company’s financial year ends. The reports you are required to include depend on the size of your company.

If your business is considered a “small company” or “micro-entity”, under Companies House thresholds, you may be able to file simplified accounts and claim audit exemption, provided you meet the relevant criteria. You might also have the option to use the Company Accounts and Tax Online service, allowing your company to submit accounts to HMRC and Companies House all at once.

Unsure of the best time to run your statutory accounts? Contact our friendly team today on 0207 043 4000.

Tip 2:  Follow a statutory accounts preparation checklist

Before you submit your accounts, make sure you’ve followed our statutory accounts preparation checklist and done all your housekeeping:

• Check you’re claiming all legal expenses

It’s important to ensure all allowable business expenses are recorded in the correct accounting period. Only costs that meet HMRC’s “wholly and exclusively for business purposes” test are deductible. While allowable expenses reduce taxable profits, incorrect or excessive claims can create compliance risk. If you’re unsure what deductions you can claim for your business, get in touch.

Related: The perks you can’t put on the business

Related: Corporate Entertainment: What expenses can you claim?

• Chase overdue invoices

Late payments remain a persistent issue for UK small businesses, often tying up cash flow and management time.

Your statutory accounts must be accurate and are prepared on an accruals basis. This means income is recorded when earned, not when cash is received. While chasing overdue invoices is important for cash flow, unpaid invoices relating to the financial year should still be included in your accounts.

Related: Should I give up, or should I just keep chasing payments?

• Get all your paperwork in order

You’ll need to be able to back up your accounts, so before the year-end make sure you have records for everything, (statements from suppliers, records of income received, etc).

Tip 3. Enlist the help of software or an accountant

It can be extremely difficult to prepare and file your accounts, but it is possible to do them yourself. A range of accounting software products are available to help you format, prepare, and file your statutory accounts. Using a software also assists in helping you include all of the necessary information.

That being said, the majority of limited companies hire an accountant to deal with their finances. A good accountant will ensure you meet all legal requirements and get everything done on time.

Tip 4. Submit your statutory accounts earlier than necessary (and sign up for email reminders)

There’s a theme occurring here: preparation and forward-planning is key! It’s important to also submit your statutory accounts with plenty of time to spare in case you get rejected, so you’ll still have plenty of time to resubmit them. You can even sign up for email reminders if you’re nervous about missing your company’s deadline.

If you file accounts late with Companies House, penalties currently range from £150 (up to 1 month late) to £1,500 (more than 6 months late) for private companies, and are doubled for repeat late filings in consecutive years. Additionally, the penalties are doubled if you submit the accounts late for two years back to back.

Note: When your company is formed, its first accounting reference date (ARD) is set as the last day of the month in which the first anniversary of incorporation falls.

Tip 5: File online

Most companies can file electronically, making it much simpler and faster. The government’s online service has checks built in to ensure all of the necessary information is provided before you submit. You’ll also be automatically emailed when your accounts have been received, and then you’ll receive another email if they’ve been accepted.

Of course you can post your accounts to Companies House, but as accounts submitted on paper are checked by hand, they can take more than a week to process. Post them next day guaranteed postage, well before the deadline so you don’t have to pay a late penalty.

When filing, it’s best to double check the required content and format for your statutory accounts. Please check out the government’s guidance for company accounts.

Get in touch if you need help with your statutory accounts

We can help with your company’s statutory accounts, whether you want the most basic form of profit and loss account and balance sheet, or bespoke management accounts, financial projection or other forms of reporting.

Rather than just making sure businesses are compliant, at Accounts & Legal we like to offer advice and training so our clients understand financial concepts and reports.

If you’d like help with your statutory reports, (or any other form of accounting), give us a call on 0207 043 4000 or try our instant accounting quote tool.

Find out more about our statutory accounts services here.