Limited Company AccountsA Limited Company must prepare a set of financial accounts each year to submit to various authorities. It is the responsibility of the company directors to ensure this is done and filed within the appropriate deadline.
What do Limited Company Accounts contain?
Director's Statement A set of company accounts will contain a statement from the directors, stating that the accounts show a true and fair picture of the Limited Company. This must be signed by the directors.
Profit & Loss They will show a Profit and Loss Statement which starts with the turnover of the company (money coming in from clients), minus all expenses, giving you the profit or loss for the year. This is kind of a review of how well your business has done. What your company owes in Corporation Tax will be worked out from the profit.
Balance Sheet There is a Balance Sheet, this shows what the business owns and owes at the point in time when the accounts were prepared. It will state how much money is in your company bank account, the value of any assets that the company has bought and paid for, e.g. computers, machinery, and cars. It will also show the value of all liabilities, e.g. overdrafts, money you may owe to suppliers at that point in time, your Corporation Tax liability and so on.
What happens to the accounts? The accounts are submitted to Companies House within 9 months of your company's year end. These go onto the public record for anyone to see.
They are then sent along with your company's Corporation Tax return to HMRC. This must take place within 12 months of your company's year end.
There are fines and penalties in place for filing late.
This is a simple introduction to what Limited Company accounts contain and why they have to be prepared. There are literally thousands of accountancy and taxation rules that apply when preparing a set of Limited Company accounts and fines and penalties in place if you make a mistake - DIY Limited Company accounts are not a good idea.
This information is for general information only. We take no responsibility for any action taken or refrained from in consequence of its contents. Always seek our professional advice specific to your circumstances before acting.