Company’s reporting at United Kingdom

UK companies incorporated in the UK are required to follow the strict accounting standards set out in the Companies Act 2006, Part 15, Chapter 2. This Act sets out how accounts must be kept for Limited (Ltd) and Limited Liability Partnership (LLP) companies.

Under these standards, depending on the size of the company and other factors, FRS 100,101,102,103,103,104,104,105 are used. Core standards such as FRS 102 and 105 play a key role in the preparation of financial statements, such as the Statement of Comprehensive Income and Statement of Financial Position, which are required to convey true information about a company’s financial position.

The income tax rate for LTD companies is 19%, which is an important aspect of tax reporting for this organisational form. However, it is worth remembering that LLPs have their own tax reporting peculiarities compared to LTDs.

Understanding and complying with these rules is key to the financial transparency and reliability of UK companies, which is an important aspect of their sustainability and long-term success in the market.

In the UK, companies are subject to three types of reporting:

Annual return or confirmation statement

Annual return or confirmation statement: This is filed once a year and contains information about the structure of the company such as registered address, details of shareholders, directors and other related information.
Confirmation statements are a form of statement that companies submit to confirm information about their structure and registration details at Companies House at least once a year. Even if a company is not active, it is obliged to file this statement.
The deadline for filing the confirmation statement is one year after the date of incorporation of the company or after the last filing of the confirmation statement. The company must file this form within 14 days of the due date.
If the company is active, it is the responsibility of not only the company itself, but also its directors and other officers to ensure that the statement is filed on time. Failure to comply with these rules may result in criminal liability. In addition, failure to comply with the filing deadlines can result in a fine of up to €5,000. This emphasises the importance of timely and correct reporting for UK companies and their management.

Financial statements or Annual Accounts

This type of statement provides full details of a company’s financial activities. Regardless of the nature of the business, all companies are required to keep financial statements.
Annual Accounts, or Financial Statements, is a document containing detailed information about the financial activities of a company for a certain period. This Annual Accounts is finalised by the last day of the month in which the company is incorporated and must be prepared and submitted no later than nine months after the end of the financial period.

These Financial Statements, known as Annual Accounts, are also submitted by the company to Companies House, the UK’s incorporation office. It is an important document that demonstrates the financial position and performance of the company for the year. The timely and accurate filing of this report plays an important role in maintaining transparency and confidence in the company’s operations.

Tax return

Tax return: For LTD type organisations, the tax period usually coincides with the company’s financial year. LLPs, on the other hand, operate between 6 April and 5 April of the following year. Every year companies are required to submit a tax return on profits to HM Revenue and Customs (HMRC).

Company ‘Tax Returns (CT600 for LTD) and Self Assessment (SA800 for LLP) are tax returns for companies in the UK.

For LTD companies, the deadline for filing a tax return, known as CT600, is 12 months after the end of the company’s financial reporting period.

In the case of LLP type companies, the deadline for filing a tax return (SA800) is 31 January each year.

These tax returns are important documents in which companies report information about their tax liability under UK tax law. Compliance with the deadlines for filing these returns plays an important role in avoiding penalties and maintaining a company’s financial discipline.

Examples:

Let us understand an example for a company of type LTD:

1) The company was incorporated on 4th November 2018;
2) The filing of Confirmation statements will be on 1st November 2019 and will need to be filed within 14 days;
3) The company’s first accounting period is 12 months from the date of incorporation, which means that the company’s first financial year ends in 12 months, i.e. November 2019;
4) The deadline for filing financial statements (Annual Accounts) for this company is by 31 August 2020. This means that the company must submit its financial data for the financial year ending November 2019 by 31 August 2020;
5) The deadline for filing a tax return (CT600) is by 30 November 2020. This document contains information on the company’s tax liability for the same financial year ended November 2019 and must be filed by 30 November 2020.

This is just an example of the time frame for the financial statements and tax return for an LTD type company based on its date of incorporation and first accounting period.

Let’s look at an example for an LLP type company:

1) The company was incorporated on 4 November 2018;
2) The filing of Confirmation statements will be on 1st November 2019 and will need to be filed within 14 days;
3) The first accounting period for this company is also 12 months from the date of incorporation. Hence, the first financial year of the company will end after 12 months i.e. November 2019;
4) The deadline for filing financial statements (Annual Accounts) for this company is by 31 August 2020. This means that the company must submit its financial data for the financial year ending November 2019 by 31 August 2020;
5) However, the deadline for filing a tax return (Self Assessment, SA800) is by 31 January 2020. This document provides information on the company’s tax liability for the same financial year ended November 2019 and must be filed by 31 January 2020.

This is an example of the time frame for financial statements and tax return for an LLP type company based on its date of incorporation and first accounting period.

Audit

Mandatory company audits play a key role in ensuring financial transparency and confidence in business operations. Enshrined in the Companies Act 2006, statutory audit, defined in Part 16, Chapter 1, Article 475, sets out the criteria under which a company must have its financial statements audited.

Companies face statutory audit if they meet at least two of the three main criteria: exceeding turnover for the accounting period of £10.2m, assets at the end of the accounting period exceeding £5.1m or having more than 50 employees. This financial data control mechanism ensures that financial statements are robust and meet standards of quality and integrity in the business environment.

For small businesses deemed to be excluded from statutory audit, conditions are set out under which they may cease to qualify as small businesses and be required to have an audit if the specified criteria are met for two consecutive years. This provides additional protection and confidence in the financial statements of enterprises, ensuring the stability and transparency of their activities.

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