Although all companies are required to submit a Company Tax Return to HMRC, small companies have options when it comes to their statutory accounts. If you\u2019re looking to save time and money, you can submit them in a simplified format known as a \u2018micro-entity account\u2019.<\/p>\n
The Companies Act 2006 classes a limited company as a micro-entity if it meets two of the three conditions during the financial year in question. A company must not have more than one of the following:<\/p>\n
Thanks to The Small Companies (Micro Entities\u2019 Accounts) Regulations 2013, micro companies are exempt from some of the financial reporting requirements when preparing their year-end Companies Act accounts. Some businesses cannot apply the exemptions of the micro-entities regime, including:<\/p>\n
This new micro-entity regime was introduced to make sure that the smallest companies in the UK weren\u2019t subject to the same time-consuming requirements as large companies.<\/p>\n
There are benefits and drawbacks to filing micro-entity accounts. On one hand, you will save time and stress if you choose to file micro-entity, as you won\u2019t need to include documents such as a director\u2019s report. If your limited company is just you and a staff member or two, it\u2019s likely you don\u2019t have shareholders who need to be kept updated about your performance. Your year-end accounts may simply be a compliance hurdle that you\u2019d like to get out of the way as quickly as possible.<\/p>\n
You may also choose to file \u2018filleted\u2019 accounts with Companies House, which can reduce how much information is publicly available about your company\u2019s performance. This can stop competitors from getting information about your financial situation or simply keep your information private.<\/p>\n
However, if you\u2019re actively seeking new shareholder buy-in or funding that will allow your company to grow, micro-entity accounts may hold you back. Without an in-depth financial picture of your operations, you could find it harder to secure\u00a0further investment or loans\u00a0that make expansion possible.<\/p>\n
If you\u2019d like to prepare micro-entity accounts, you\u2019ll need:<\/p>\n
Unlike abridged accounts that small businesses can file, you won\u2019t need to include a director\u2019s report. Many micro-entities are also exempt from being audited, so you will not need to file an auditor\u2019s report.<\/p>\n
You can also choose to fillet your accounts for the public record to reduce how much information is publicly available. In this case, you\u2019ll only need file a balance sheet with footnotes. Make sure you accompany it with a statement that the profit and loss account hasn\u2019t been filed and that your annual accounts have been delivered in accordance with the Small Companies\u2019 regime.<\/p>\n
Even if you do file micro-entity accounts, it\u2019s important that you privately provide as much information as you can to your company\u2019s members and shareholders. They have invested time and or money into your business and have a right to know how it is performing.<\/p>\n
Micro companies have various options for filing their micro-entity accounts, including the online Companies House WebFiling service. If you\u2019d like to file your accounts with HMRC and Companies House at the same time, you can use the Company Accounts and Tax Online (CATO) service too. You\u2019ll need your Government Gateway details and a Companies House company authentication code to do so. If it\u2019s easier, you can also file your accounts on paper and post them in, but it\u2019s crucial you allow plenty of extra time.<\/p>\n
Filing micro-entity accounts can be complex, as you\u2019ll need to make sure your accounts meet the FRS 105 Financial Reporting Standard. Even if you\u2019re familiar with preparing a profit and loss account and balance sheet, you might not understand what\u2019s required in the abridged versions. To make sure you stay compliant and to save you a lot of time and hassle, it\u2019s best to use an accountant to file micro company accounts.<\/p>\n
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Preparation and filing annual micro-entity accounts<\/p>\n
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