Filing Company Accounts for a Limited Liability Company (LLC)

Accounting for your limited company is required by law, but it can be difficult.

At the end of each financial year, your company prepares complete annual financial statements and distributes them to shareholders, Companies House, and HMRC as part of your tax return. Annual accounts are required for limited liability companies, though smaller businesses may submit simpler accounts.

Before preparing your accounts, please seek professional advice. Consult an accountant or the government’s accounting guidance for corporations.

The Accounting Deadlines 

Annual accounts must be sent to each shareholder and filed with Companies House. The public has access to your Companies House accounts.

Accounts for a private company must be received by Companies House within nine months of the accounting reference date (ARD). The end of your fiscal year is represented by your ARD.

Your company’s fiscal year starts on the date of incorporation, and the first accounting reference date is one year later, on the last day of the month. Year after year, this is your ARD. For example, if you established your company on July 6, 2018, your first annual report date will be July 31, 2019, and so on.

Because you deliver company accounts nine months after receiving your ARD, you must deliver your first company accounts 21 months after registering with Companies House (your first financial year, plus nine months).

Late filing penalties range from £150 for less than a month to £1,500 for more than six months.

Corporation tax is then calculated using your company’s financial statements and tax return, but it is due before you file your tax return.

How to Prepare a Small Business’s Financial Statements 

A profit and loss statement summarizes the company’s sales, operating expenses, and any profit or loss earned during the fiscal year. You may also need a director’s and auditor’s report, depending on the size of your company.

If your company is classified as a micro-entity by the government, you may be able to avoid an audit by filing ‘abridged’ accounts with Companies House.

If your company has two of the following characteristics, it is considered small: a balance sheet with a maximum value of £5.1 million, and less than 50 employees.

A micro-entity has at least two of the following characteristics: a balance sheet with a maximum of £316,000, and a maximum turnover of £632,000

These organizations may choose not to have their financial statements audited and instead submit a copy of their director’s report and profit and loss statement instead. A less complicated balance sheet

Companies House only requires the balance sheet for micro-entities.

Statutory accounts must meet one of the following accounting standards by the International Financial Reporting Standards (IFRS) and the New UK Generally Accepted Accounting Practice.

How to File Annual Accounts for a Company 

While accounting software for preparing and filing annual financial statements is widely available, you can submit your accounts to Companies House and HMRC using the Company Accounts and Tax Online (CATO) service.

You can also prepare your accounts on paper and mail them to Companies House, but HMRC warns that this takes a long time.

The tax return for the corporation must be filed electronically. If you are unable to file electronically or wish to file in Welsh, you may use paper form CT600.

Conclusion

You may choose to handle all aspects of limited company accounting, including annual accounts, on your own. However, it is difficult to do everything yourself due to the structural differences between limited companies and sole proprietorships. Making a mistake has serious consequences.

Accountants are financial professionals who can help you file your tax returns with HMRC and Companies House. They can help you meet legal obligations and avoid fines by ensuring that your company’s financial records are up to date. Keep in mind, though, that even if you hire an accountant, the company’s directors are legally responsible for accurate accounting.

Are you looking for professional bookkeeping and accounting services in Bristol? BarrettStacey Accounting provides all your needs on a fixed fee basis or a package, eliminating unpleasant surprises at the end of the year. Work with us today!