Every UK limited company must prepare annual accounts for Companies House each year, but you only need to send accounts to HMRC if your company is active for Corporation Tax. You will have different filing deadlines for delivering accounts to Companies House and HMRC.
You can file simplified accounts with Companies House, depending on the size and trading status of your company. However, if your company is active, you will need to send full (statutory) annual accounts to HMRC – regardless of your company’s size.
In this post, we’ll take a look at the differences between accounts for Companies House and accounts for HMRC, including the types of accounts you can file and the different deadlines that apply.
Are annual accounts for Companies House and HMRC the same?
Annual accounts requirements for Companies House and HMRC are not the same. There are three main differences:
- Company trading status
- Types of accounts and the amount of information you need to include
- Filing deadlines
The first thing you need to know is whether your company is active for Corporation Tax. This will determine whether you need to file accounts with Companies House and HMRC or just Companies House.
If your company is active for Corporation Tax – you will need to file accounts with both Companies House and HMRC each year. Your accounts for HMRC will be included as part of your Company Tax Return.
The size of your company will determine the type of accounts you file at Companies House and the amount of financial information you need to include. For most companies, this means that less information is provided in their accounts for Companies House than their accounts for HMRC.
If your company is dormant – you only need to file accounts with Companies House. You won’t have to send any accounts to HMRC, because dormant companies do not have to prepare Company Tax Returns.
Annual accounts for HMRC
If your company is active, you must prepare full (‘statutory’) accounts for HMRC – regardless of the size of your company.
These accounts will form part of your Company Tax Return and must include:
- a ‘balance sheet’ – this will show the value of everything that your company owns (assets), owes (liabilities), and is owed on the accounting reference date (the last day of the company’s most recent financial year)
- a ‘profit and loss account’ – this will show your company’s sales, running costs and expenses, and its profit or loss over the financial year
- additional notes about the accounts, where relevant
- a director’s report, unless the company is classed as a micro-entity
You will also need to include an auditor’s report, unless your company qualifies for audit exemption.
My company is dormant – do I need to file accounts with HMRC?
Dormant companies do not have to file Company Tax Returns. Therefore, if your company is dormant, you do not need to file accounts with HMRC.
You will still need to file dormant company accounts with Companies House, and you may have to prepare accounts for the company’s members (shareholders).
Annual accounts for Companies House
Accounts for Companies House are based on a company’s size and trading status (i.e. whether it is active or dormant).
If your company is active, there are four classifications of company size to consider when you’re preparing accounts – micro-entity, small, medium, and large.
Micro-entities and small companies
Micro-entities (very small companies) and small companies can deliver an abridged (simpler) version of their statutory accounts to Companies House, provided that all members of the company agree to it.
To qualify as a micro-entity, your company must meet at least two of the following criteria:
- annual turnover is £632,000 or less
- the balance sheet total does not exceed £316,000
- the average number of employees is not greater than 10
To qualify as a small company, your firm must meet at least two of the following criteria:
- annual turnover is £10.2 million or less
- the balance sheet total does not exceed £5.1 million
- the average number of employees is not greater than 50
Abridged accounts contain a simplified balance sheet, along with any relevant notes pertaining to the accounts. You may also include a simplified profit and loss account and a copy of the director’s report, if you wish.
Unlike accounts for HMRC, accounts filed at Companies House are disclosed on the public register of companies. Therefore, when you file abridged accounts, less information about your company finances will be publicly available.
However, micro-entities and small companies must still send full accounts to their members and to HMRC as part of their Company Tax Return.
Medium-sized and large companies
Medium-sized companies can prepare annual accounts in accordance with special provisions in the Companies Act 2006. They also have the option to file reduced information with Companies House.
To qualify as a medium-sized company, your firm must meet at least two of the following criteria:
- annual turnover is £36 million or less
- the balance sheet total does not exceed £18 million
- the average number of employees is not greater than 250
Large companies must file full accounts with Companies House. To qualify as large, your company must meet at least two of the following criteria:
- annual turnover is more than £36 million
- the balance sheet total is more than £18 million
- the average number of employees is greater than 250
If your company is dormant, you can file dormant company accounts, which are even simpler than the abridged accounts filed by micro-entities and small companies.
A dormant company is one that has had no ‘significant accounting transactions’ during its financial year and accounting period for Corporation Tax. In other words, it’s not trading and it is not spending or receiving any money.
Different filing deadlines for annual accounts
Companies House and HMRC impose different filing deadlines for annual accounts. They are as follows:
- first accounts for Companies House – 21 months after the date of company formation
- subsequent accounts for Companies House – 9 months after the end of your company’s financial year
- accounts for HMRC (as part of the Company Tax Return) – 12 months after the end of your accounting period for Corporation Tax
Your company’s accounting period for Corporation Tax is the period of time covered by your Company Tax Return. Normally, it will be the same as the 12-month financial year covered by your accounts.
Whilst different filing deadlines apply, many companies choose to file with Companies House and HMRC at the same time. Joint filing can be carried out using HMRC’s online service or accounting software. Alternatively, you can send your accounts to Companies House and HMRC separately.
Thanks for reading!
So there you have it – we’ve explained the difference between accounts for Companies House and accounts for HMRC. This includes when you need to file accounts with both agencies, the different types of accounts you need to prepare, and the deadlines for delivering them each year.
If you have any questions about annual accounts – or any other aspect of setting up and running a limited company – please contact us or leave a comment below.