When running your own business, you may feel as though there are multiple legal duties on your plate and often, you may be searching for clarity on the different forms and factors. Today, we are here to provide you with the assistance you may be requiring on the matter of full and abbreviated accounts.
Within the world of business, there are a series of reports which need to be submitted annually to Companies House. Most small UK based businesses are entitled to complete full and abbreviated accounts – but what is the difference and why are they required?
Full company accounts are a collation of essential records such as the profit and loss account, balance sheet and director records. Although it tends to be only the abbreviated accounts that are submitted to Companies House annually, it would prove beneficial for you to complete the full company accounts for the profit and loss document which is not a requirement within the abbreviated version. This statement eases the difficulty of setting any future plans for your business whilst also proving as an essential document for you personally if applying for a mortgage.
Abbreviated accounts are simply a condensed version of your full company accounts and is the only form of record that needs to be filed with Companies House each financial year, should you meet the following regulations:
- If your business has an annual turnover of no more than £6.5 million
- If your balance sheet total is no more than £3.26 million
- Your average number of employees is no more than 50
Why do we not file full company accounts?
There are two main reasons for filing only the abbreviated accounts. One is due to the fact that the size of your business may not qualify for a full audit. The second is to protect your company from the risk of members of the public, or your competitors, from viewing any detailed and private information or figures in relation to your business. As stated before, full company accounts should still be competed to give you a detailed overview into the function of your business finances and functions.
Remember, your accounts should be filed at Companies House no later than nine months after year end. If you have an accountant or bookkeeper, they should handle this for you.
If you require any further information on the accounts in which your company must file annually, of if you are seeking professional bookkeeping advice or support, please do not hesitate to get in touch with a member of our qualified Cain & Beer team where we will be happy to help you. Give us a call on 020 3633 1340 or email us at firstname.lastname@example.org and we will get back to you.