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guide

Accounts and tax returns for private limited companies

Source: GOV.UK

1 Overview
2 Prepare annual accounts
3 Prepare a Company Tax Return
4 File your accounts and Company Tax Return
5 Corrections and amendments
6 Penalties for late filing
  • 1. Overview

    At the end of its financial year, your limited company must prepare full (‘statutory’) annual accounts.

    You then use this information to:

    • send accounts to Companies House
    • pay Corporation Tax - or tell HM Revenue and Customs (HMRC) that your limited company doesn’t owe any
    • send a Company Tax Return to HMRC
    Action Deadline
    File annual accounts with Companies House 9 months after your company’s financial year ends
    Pay Corporation Tax 9 months and 1 day after your company’s financial year ends
    File a Company Tax Return 12 months after your company’s financial year ends

    These deadlines are for private limited companies.

    Your Corporation Tax and Company Tax Return deadlines may be different if your accounting period is different to your financial year.

    Get more time to file your accounts

    Companies House may extend your accounts deadline if both:

    • an event you couldn’t control stops you from sending your accounts
    • you apply for more time before the filing deadline

    Email or write to Companies House, explaining what’s happened and how much more time you’ll need to file your accounts.

    Companies House
    Crown Way
    Cardiff
    CF14 3UZ

    If the company is new or was dormant

    You must take additional steps:

  • 2. Prepare annual accounts

    Your company’s annual accounts - called ‘statutory accounts’ - are prepared from the company’s financial records at the end of your company’s financial year.

    You must always send copies of the statutory accounts to:

    • all shareholders
    • people who can go to the company’s general meetings
    • HM Revenue and Customs (HMRC) as part of your Company Tax Return
    • Companies House (unless you send ‘abbreviated’ accounts - see below)

    How to put together your company’s statutory accounts

    Statutory accounts must include:

    • a ‘balance sheet’, which shows the value of everything the company owns and is owed on the last day of the financial year
    • a ‘profit and loss account’, which shows the company’s sales, running costs and the profit or loss it has made over the financial year
    • notes about the accounts
    • a director’s report

    You might have to include an auditor’s report - this depends on the size of your company.

    A director must sign the balance sheet and their name must be printed on it.

    Accounting standards

    Your statutory accounts must meet either:

    • International Financial Reporting Standards
    • UK Generally Accepted Accounting Practice

    You can use accountants or tax advisers to make sure your accounts meet the standards.

    Small companies, dormant companies and abbreviated accounts

    Small companies

    Your company will be ‘small’ if it meets 2 of the conditions below:

    • its turnover is no more than £6.5 million
    • it has no more than £3.26 million on its balance sheet
    • it has less than 51 employees

    Your company will be a ‘micro-entity’ if it meets 2 of the conditions below:

    • its turnover is no more than £632,000
    • it has no more than £316,000 on its balance sheet
    • it has less than 11 employees

    If your company is small or a micro-entity, you can:

    • send shorter (‘abbreviated’) accounts to Companies House created from the statutory accounts - this means less information about your company will be publicly available
    • use the exemption so your company’s accounts don’t need to be audited
    • choose whether to send a copy of the director’s report or not

    You must still send full ‘statutory’ accounts to shareholders and to HMRC with your Company Tax Return.

    Dormant companies

    Your company is called ‘dormant’ by Companies House if it’s had no ‘significant’ transactions in the financial year that you’d normally report. Significant transactions don’t include:

    • filing fees paid to Companies House
    • penalties for late filing of accounts
    • money paid for shares when the company was incorporated

    Dormant companies that qualify as ‘small’ only need to send Companies House abbreviated accounts and don’t need to be audited.

    Check if your company is also dormant for Corporation Tax.

    Prepare abbreviated accounts

    Abbreviated accounts are the balance sheet from your company’s statutory accounts, along with any notes.

    The balance sheet must have the name of a director printed on it and must be signed by a director.

    Find out exactly what to include in your accounts depending on your company type, eg small, medium or dormant.

  • 3. Prepare a Company Tax Return

    You must send a Company Tax Return online to report your company’s Corporation Tax to HM Revenue and Customs (HMRC).

    You must still do this if you have nothing to pay, unless HMRC tells you not to because your company is dormant for Corporation Tax.

    Use HMRC’s online Corporation Tax service to send your Company Tax Return. Log in and follow the instructions to:

    • create or upload your company’s statutory accounts
    • create or upload Corporation Tax calculations and any supporting documents
    • download and fill in form CT600

    HMRC has detailed guidance on filling in form CT600.

    Information you’ll need

    You’ll need to give details including:

    • capital allowances you want to claim for business assets you’ve bought
    • gains on assets that you’ve sold for more than you paid for them
    • directors’ loans not repaid at the end of the company’s financial year
    • repaid directors’ loans you want to reclaim tax for
    • reliefs you want to claim
    • any losses that you ‘carry forward’ from your previous accounting period

    If you made a loss

    A loss will reduce your Corporation Tax bill. If you’ve made losses that you can’t claim back in one tax return because they’re too large, you can either:

    • claim the loss against your previous year’s profit - you may get a repayment of Corporation Tax if you do this
    • claim the loss in future financial years (if your company carries on the same type of trade)

    To claim the loss against your previous year’s profit either:

    • fill in the appropriate box on your Company Tax Return
    • write to your Corporation Tax office up to 2 years after the end of the financial year when you made the loss

    Check recent tax forms or letters from HMRC for your Corporation Tax office address or call the helpline.

    Refunds

    You tell HMRC how to make refunds (sometimes called ‘repayments’) when you complete your Company Tax Return.

    You might not get a refund if your company owes HMRC for other taxes.

  • 4. File your accounts and Company Tax Return

    You file your accounts with Companies House and your Company Tax Return with HM Revenue and Customs (HMRC).

    If your accounts and Company Tax Return cover the same period, you can send them together.

    If you’re sending your company’s first accounts, you’ll usually need to send more than one Company Tax Return.

    You need your:

    • HMRC online account details
    • company registration number
    • Companies House online account details
    • statutory accounts

    Sending your accounts and Company Tax Return together

    You can file your accounts with Companies House and tax return with HMRC jointly using accounting software or HMRC’s online Corporation Tax service.

    Sending your Company Tax Return to HMRC separately

    You must do this online, using either:

    Sending accounts to Companies House separately

    You can send your accounts to Companies House online.

    Using accountants or tax advisers to send your returns and accounts

    To authorise them for HMRC, either:

    Authorise your accountant or tax adviser to use your Companies House authentication code if you want them to deal with Companies House on your behalf.

  • 5. Corrections and amendments

    Your company accounts

    You must send amended accounts to Companies House on paper.

    Amended or corrected accounts must be for the same period as the original accounts.

    You must clearly say in your new accounts that they:

    • replace the original accounts
    • are now the statutory accounts
    • are prepared as they were at the date of the original accounts

    You must write “amended” on the front - the accounts may be rejected as duplicates if you don’t.

    Your original accounts will remain on file at Companies House.

    If you only want to amend one part of the accounts you can do so by sending a note saying what needs to be changed. This will be added to your original accounts documents.

    Your Company Tax Return

    You must usually do this within 12 months of the filing deadline.

    You can either:

    Check recent tax forms or letters from HMRC for the Corporation Tax office address or call the helpline.

    If you made an error, you should correct it as soon as possible. HMRC may charge you a penalty for errors.

    HMRC can make a compliance check to check for errors in your Company Tax return.

  • 6. Penalties for late filing

    You’ll have to pay penalties if you don’t file your accounts with Companies House or tax return with HM Revenue and Customs (HMRC) by the deadline.

    Late accounts for Companies House

    Your company will have to pay a penalty charge if you file your accounts after the due date.

    Time after the deadline Penalty (for private limited companies)
    Up to 1 month £150
    1 to 3 months £375
    3 to 6 months £750
    More than 6 months £1,500

    Penalties for public limited companies are different.

    The penalty is doubled if your accounts are late 2 years in a row.

    You can be fined up to £5,000 and your company struck off the register if you don’t send Companies House your accounts or annual return.

    Appeal against a late filing penalty

    If you want to appeal a penalty you must give a reason why you couldn’t file your accounts on time.

    You must prove the circumstances were both out of your control and made it impossible for you to meet the deadline, eg a fire destroyed your records a few days before your accounts were due.

    You can’t appeal by claiming:

    • your company is dormant
    • you can’t afford to pay
    • it was your accountant’s (or anybody else’s) fault
    • you didn’t know when or how to file your accounts
    • your accounts were delayed or lost in the post
    • the directors live or were travelling overseas

    You can send a letter to the address on the front page of the penalty invoice, or send an email including the penalty reference.

    You’ll get a response within 10 working days and the penalty will not be collected while your appeal is being considered.

    If your appeal is rejected you can write to the Senior Casework Unit (SCU) in the Late Filing Penalties Department at the Companies House office that deals with your account.

    Companies House
    Crown Way
    Cardiff
    CF14 3UZ

    Companies House
    4th Floor
    Edinburgh Quay 2
    139 Fountainbridge
    Edinburgh
    EH3 9FF

    Companies House
    Second Floor
    The Linenhall
    32-38 Linenhall Street
    Belfast
    Northern Ireland
    BT2 8BG

    If the SCU rejects your appeal, you can write to the Independent Adjudicators and ask them to review your case.

    Find out more about late penalty appeals in different situations.

    Late Company Tax Return to HMRC

    Time after the deadline Penalty
    1 day late £100
    3 months late Another £100
    6 months late HMRC will estimate your company’s tax bill and add a penalty of 10% the unpaid tax
    12 months late Another 10% of any unpaid tax

    If your returns are late 3 times in a row, the £100 penalties are increased to £500 each.

    If your return’s more than 6 months late

    If your Company Tax Return is 6 months late, HMRC will write telling you how much Corporation Tax they think you must pay. This is called a ‘tax determination’. You can’t appeal against it.

    You must pay the Corporation Tax due and send your Company Tax Return. HMRC will recalculate the interest and penalties you need to pay.

    Appeals

    You can appeal to HMRC against a late filing penalty if you have a ‘reasonable excuse’.

    If you have a reasonable excuse, you can appeal against a penalty by writing to your company’s Corporation Tax office.

    Check recent tax forms or letters from HMRC for your Corporation Tax office address or call the helpline.

govuk

Last updated: 03 October 2014