When you’re running a business, there are a number of tax returns, accounts, and other financial obligations you should be aware of.
All private limited companies operating within the UK must complete statutory accounts, accurately and on time.
Statutory accounts are also known as annual accountants. They are a set of in-depth financial reports that are produced at the end of every financial year.
It’s important you understand exactly what statutory accounts are and how to prepare them.
What are statutory accounts?
Statutory accounts are an annual set of accounts that report the financial activity, as well as the performance of a limited company in the UK, so that corporation tax can be worked out.
Copies of statutory accounts are shared with a number of different parties including HM Revenue and Customs, Shareholders, Companies House, as well as anyone who is directly associated with the company.
How to prepare statutory accounts?
All Statutory accounts must be completed accurately and prepared in line with stringent regulations set by IFRS Standards or the New UK GAAP. And, when completing your accounts, they must contain the following information:
- A balance sheet – this is an in-depth financial statement which outlines how much the company owns, owes or is owed at the end of the financial year.
- The balance sheet must always be signed by a director and include a director’s name.
- A profit and loss statement – this is also known as a profit and loss account or a P&L account, which shows the business’s net profit or loss.
- Notes about the accounts.
Depending on the size of your company, you might also need to include the following information:
- A directors’ report
- An auditor’s report.
- Statutory accounts for small businesses
Of course, if you need assistance when it comes to preparing your accounts, it’s always worthwhile enlisting the help of a professional accountant. An accountant can prepare your accounts and will always be on hand to answer any of your questions.
Does every company need to prepare Statutory accounts?
No, not every company needs to prepare Statutory accounts. For example, there are three types of businesses which are subject to different rules including small companies, micro-entities, and dormant companies. Small companies can send ‘abridged’ accounts to Companies House, which are far simpler than Statutory accounts.
Your company is considered ‘small’ if it meets the following criteria:
- A turnover of less than £10.2 million
- 50 employees or less.
- £5.1 million or less on the balance sheet
Why choose React Accountancy?
Here at React Accountancy, we provide trusted accountancy services to start-up, established and multi-national businesses across a diverse range of industries.
From the moment you get in touch, our approachable, friendly and professional team will go above and beyond to ensure that you receive the right advice, support and accountancy solutions for your business.
All of our team has years of experience in providing accountancy services that support your business including complex financial issues.
Get in touch today for further information about any of our services. You can reach us on 01914324110 or contact us via email using email@example.com