Facebook Twitter Linkedin Instagram Pinterest
Instant Quote
Call Me Back
prepare annual accounts for limited company

How to Prepare Annual Accounts for Limited Company?

12/05/2025Limited Company

If you are running a business, financial recording and legal fulfillment demand that to prepare annual accounts for a limited company, as it is a fundamental requirement. The records provide complete information about the financial state of the company at the year’s end. In this article you will know essential steps and requirements to  prepare annual accounts for limited company. Talk to our best accountants and bookkeepers in the UK at CruseBurke. You will get instant help about how to prepare annual accounts for limited company. Understanding How to Prepare Annual Accounts for Limited Company A company must prepare annual accounts, which function as statutory accounts, when the financial year period ends. Your business generates these accounts through financial records that your company maintained throughout the entire year. A legal requirement exists for you to submit your statutory accounts to three different entities: stakeholders, general meeting attendees, and Companies House and HMRC. All company shareholders Persons who maintain a right to join general company meetings can access the information. Companies House HM Revenue and Customs (HMRC) (as part of your Company Tax Return) However, unauthorised entities can file simplified or abridged accounts when their business type matches any of the conditions, including small company status, micro-entity status, or being dormant. All accounts must abide by specific official rules established as accounting standards. These could be: International Financial Reporting Standards (IFRS) A business using UK Generally Accepted Accounting Practice (UK GAAP) operates under this accounting standard. What Should be Included to Prepare Annual Accounts for a Limited Company? Statutory accounts contain three primary documents, including the balance sheet, the profit and loss account, and the notes to the accounts. Balance Sheet: The financial statement that shows all things that belong to and are due to the company on the fiscal year closing date. Profit and Loss Account: The profit and expenditures alongside the return or loss amount for the year are present in the company’s financial statement. Notes to the Accounts: These provide extra details and explanations about the numbers in the financial statements. Director’s Report: A brief report from the company’s director about the financial position of the business. (Not required for micro-entities.) Auditor’s Report: The size of a company determines whether they need confirmation from an independent auditor regarding the accounts. Moreover, all balance sheets must contain the written signature of a company director whose printed name appears in the document. Special Rules for Dormant, Small, and Micro-Entities How to Prepare Annual Accounts for a Limited Company? The regulations for preparing annual accounts depend on the dimensions and operational intensity of your company structure. Let’s break down the categories: Dormant Companies Companies House classifies businesses as dormant if those firms report no notable financial operations in their yearly business period. The list of financial operations that may or may not qualify as significant transactions for accounting purposes exists. The costs of submitting documents to Companies House include registration expenses Penalties for late filing. Moreover, new shareholders buy company shares when the organisation initiates its operation. However, small dormant businesses do not need audit services because they satisfy the criteria. Conduct an assessment for dormant status under corporation tax regulations because this holds its own separate requirements. Small Companies A small business meets the classification when it demonstrates either a £15 million turnover limit or a total value of £7.5 million or has less than 50 employees in its workforce. Turnover is £15 million or less The total figure on the balance sheet equals £7.5 million or less. 50 employees or fewer Some major benefits for small companies include Exercising an audit exemption gives you the option to not require external audit verification. Your business holds the option to exclude sending director’s reports together with profit and loss accounts to Companies House. Your company has the option to deliver abridged versions instead of standard full accounts. Abridged Accounts The information contained in abridged accounts presents fewer details than what full statutory accounts would typically disclose. The submission of abridged accounts becomes possible only when shareholders approve them unanimously. Abridged accounts include: A simplified balance sheet Notes to the accounts Optionally, a simplified profit and loss account and a director’s report balance sheet to display a printer-drafted director name along with a signature. Additionally, when you submit abridged accounts, your business data becomes accessible to a reduced extent on Companies House. Micro-Entities Micro-entities represent the most basic form of company, which receives complete reporting simplification. Micro-entity status applies to companies that fulfill either of these two conditions and one additional requirement. Turnover is £1 million or less The company balance sheet reveals a total of under £500,000. 10 employees or fewer Benefits for micro-entities are enlisted below: You can create basic accounts that fulfil only the fundamental legal requirements. Above all, you must submit a streamlined balance sheet through Companies House. Small company audit exemptions are available to you since you fulfil the same qualification requirements. Making Corrections or Sending Amended Accounts The procedure for changing incorrect information in submitted company records or for sending revised accounts to Companies House. You can send amended (corrected) accounts to Companies House for detection of errors in your company’s annual accounts after submission. There are three ways to submit amended accounts. On paper, by post The filing software allows you to make corrections if it was your initial method of submission. Companies House permits amended accounts for the same financial period but not different from the original accounts. The following requirements must be followed when you deliver amended paper-based accounts to Companies House: These documents should declare their status as new versions in place of initial reports. Please mark the documents as amended through a visible notation on the front page. These accounts have become part of the required statutory documents. The documents need to maintain identical preparation quality to their original date submissions. The original version of the accounts remains on record at Companies House. Companies House will store both the original …

Read more
what is a person with significant control

What is a Person with Significant Control?

28/04/2025Business

A successful business requires strong decision-making skills, managerial skills, and enough cash to execute your plans. Handling all company matters is difficult, so you need to distribute the tasks among people, where a few people will have more authority than the rest. This article covers how much authority a person with significant control can enjoy along with performing crucial duties in the company. Talk to our best accountants and bookkeepers in the UK at CruseBurke. You will get instant help about what is a person with significant control. What is a Person with Significant Control? A person with significant control (PSC) is the one who owns the company wholly or in partnership or controls your company. A person with significant control is called a “beneficial owner.” Before starting a company, a businessman must specify his person with significant control. Those persons could be you or someone who is associated with your business. An enterprise can have one, two, or multiple persons with significant control. The names of persons with significant control must be provided to the UK government. The company owner must record their details in the person with significant control register of the company and also mention this information when they start the business. If a businessman is unable to secure his person with significant control or he does not need it, inform the UK government in both scenarios. Identifying your PSC The UK government has defined the criteria for identifying a person with significant control; a person with significant control must meet one or more conditions, which are labelled as “nature of control”. The person with a significant control register of the company must mention which conditions are met. The “nature of control” for the person with significant control are mentioned below They must hold more than 25% shares in the company They must have voting power of more than 25% in the company The person with significant control must have the authority to appoint or remove the majority of the board of directors of the company. To check voting power, you must check the company register for information on members, company shareholders and the voting power they enjoy in the company. The voting power information can also be obtained from the company constitution and articles of association. These documents also have information about how many shares a person with significant control in the company owns. Other Significant Influence or Control The company person with significant control can influence or control the company in other ways. They can control the company directly or on behalf of someone else. For instance, a person with significant control may affect or control the actions of directors or shareholders. This condition is applicable in a few circumstances. If your company is controlled by a trust or firm without ‘legal personality’ If you are nominating a trust or firm as your controlling authority, then you should record all the trustees and members or partners of the firm as person with significant control and register this information at the Companies House. Recording your PSC Information The details that should be recorded while registering the person with significant control are mentioned below; however, they should be confirmed first to avoid any inconvenience. name date of birth nationality and country of residence of the PSC correspondence address – known as the ‘service address’ home address (this must not be disclosed) the date they became a PSC of the company the date you entered them into your PSC register all natures of control which apply The amount of company shares owned by the person with significant control and the voting rights they enjoy must fall into the categories below over 25% up to (and including) 50% more than 50% and less than 75% 75% or more If Your PSC Information Changes If a company changes its person with significant control or any information regarding them, the information in the company’s person with significant control register must be updated. The information of the person with significant control must be updated within 14 days of the information change. These changes in the information must be sent to the Companies House within 14 days so that the information is updated with each stakeholder. This process should be completed within 14 days. It can be done online, which is much easier than going to the Companies House office. If a business owner does not have an online account at the Companies House portal, then they first have to register for online filing. The information can also be sent online through third-party software. Contacting your PSC The search and identification process for a person with significant control of the company is extensive. The company owner must contact each person whom he thinks is eligible for the post. While in the UK, a company must provide all the required information to the UK government; however, refusing to do so is a criminal offense. The company owner has the power to apply restrictions on the voting power and shares of a person with significant control. Restricting the voting rights and shares held is a crucial step. Such a step should be taken only if the person with significant control is not providing the required details despite repeated requests. Information in your PSC Register The information in the person with significant control register of the company should be complete according to the criteria of UK government and updated as well. If the information is incomplete and outdated, then you must provide the reason why this happened and put that statement in your PSC register. The PSC register should not be blank; display required information. Conclusion The person with significant control is the one who owns the company or controls the company. There can be one, two, or multiple persons with significant control over the company. The information regarding PSC should be added and updated in the PSC register of the company. The PSC should provide all the needed information to the UK government. If the information is not provided, then …

Read more
company accounting period

What is my Company Accounting Period?

11/02/2025Accounting

For a growth curve of your business in a financial year, periodic sessions of accounting and bookkeeping processes are important. Without these practices, you cannot grow a business from scratch or continue the growth of an established one. Knowing What is my company accounting period is important for every businessman associated with small or large business setups. This article will help you understand this in detail. Talk to our best accountants and bookkeepers in the UK at CruseBurke. You will get instant help about the company accounting period. What is a Company’s Accounting Period? Establishing and maintaining a business requires your dedication, hard work, and vigilance. When you are running a business or establishing a new one, there are many deadlines and targets that you must achieve in a set time, and the company accounting period is one of them. The company accounting period refers to the period used by the company to finalize its transaction and account procedures for a financial year. This duration can be weekly, monthly, bimonthly, or yearly depending upon the span of the company’s business. The periodic accounting sessions regularly allow transparency in company cash flow and help in planning future business strategies. In the company accounting period, the accounting reference date is the day that marks the end of the financial year. This date is usually set by the company depending upon the accounting period. Why is a Company’s Accounting Period Important? Knowing your company’s accounting period is crucial for the following reasons: Meet tax deadlines: the company accounting period ensures periodic completion of accounting procedures. This helps with maintaining tax records throughout the year. Master your financial reports: The company accounting period is important as it generates a financial report showing the growth curve of the company and helps you keep track of the cash flow in the company and if there is any fraudulent activity going on in the accounts department. Analysis of the business: The financial reports help you analyse how well your current business strategies are contributing towards the growth of your business and generating yearly profits. Getting the Company Accounting Period Right Company accounting periods are defined in the following ways: Fiscal year: A fiscal year is defined as a year that ends on any day other than December 31st; for example, a fiscal year can end on March 31st. Calendar year: A calendar year is 12 months starting on January 1st and ending on December 31st. Accounting reference period: This is the time duration commonly used for accounting purposes by businesses and limited companies. The accounting reference period ends on the accounting reference date, which is defined by the limited company itself. How Do Company Accounting Periods Work? As mentioned above, there are multiple types of accounting periods. A company may choose to adopt one or multiple accounting periods. For example, a company may wish to close its financial records in June. This marks the accounting reference date defined by the company. Now it’s the choice of the company to do accounting sessions on a weekly, monthly, or quarterly basis (every four months). The accounting reference periods are useful for accountants and shareholders in a company. Having periodic accounting sessions helps the company and its shareholders to check where the company stands among its competitors in the market. The accounting periods can also be used to compare how the changes in strategies are affecting the company’s business, client and company relationships and overall reputation. For example, if a quarterly accounting period indicates a decline in company growth, the company makes changes in its business strategies. On the next quarterly accounting session, the result indicates growth in company business as compared to the previous accounting period. Where is the Company’s Accounting Period Indicated? The financial statements issued by the bank on the defined accounting period and the company accounting register indicate the accounting reference period in their headers. The bank financial statements indicate the transactions and payments history of the company account and indicate the balance at the end of the accounting period. On the other hand, the company balance sheet indicates the shareholder’s list, shares of the company in the stock market, other assets associated with the company, liabilities, equity at a specific time in the financial period, dividends given by the company to its shareholders, and corporation tax paid by the company at the end of the financial year to the HMRC. Requisites for the Accounting Period The accounting period revolves around two methods described below. 1- Revenue recognition principle As the name indicates, this method states that revenue should be added to the company record only when the company gains profit, not when the amount of cash is exchanged. If a company is unable to earn profit in a financial year or in its accounting period, then the company must open a deferred revenue account to show that it has not earned any revenue yet. 2- Matching principle The matching period rule, as the name indicates, is that during an accounting period, the cost of goods sold (COGS) should be matched with the revenue earned. This means that the revenue earned and the cost of goods should be matched at the same time. This method is applied in expanded form where the company expects that the revenue will be generated in the long run. For example, a company buys new machinery to upgrade its current setup. Now the cost of machines will be covered as the products will be produced, marketed, and sold, and then revenue will be generated. Now the event is associated with the machine, but the accounting period differs. In such cases, the expense of the machine is spread over the useful life of the machine or the guarantee period by the manufacturers. Can a Company Change its Accounting Period? An accounting period is used for business analysis. A company can change its accounting period if the board of directors feels that the growth and expansion pattern of its business has changed. …

Read more
how to set up a limited company

How to Set Up a Limited Company?

06/12/2024Accounting , Limited Company

One of the prominent business structures in the UK industry is a limited company. If you are a beginner and aim to set up one, you need to learn everything about how to set up a limited company in the UK. If you choose a limited company to manage your business activities, there are significant advantages offered for the company owner and the shareholder as well. The UK law also recognises a limited company as a separate entity from the owner or the shareholders. This means the personal assets of the owners and shareholders are protected in case of any legal issues or financial struggles of the business. However, before deciding on the right business structure for your business type, it is better to know how a limited company works and the steps to set up one. So, continue reading to gather more information in this regard. Our team of professional members loves to hear out your business problems and find out the possible and suitable solutions quickly to the reporting in the UK. Contact us now. Understanding the Structure of a Limited Company Usually, a limited company is known as a Limited or Ltd in the UK. It is one of the common business structures. This limits the liability of assets when the business is run by a limited company. So, unlike the case of a sole trader, the assets of the company are considered separate from the personal assets of the shareholders. A limited company is also taken as a separate entity from its owner, which is quite the opposite case from a sole trader, where the business and owner are considered the same entity. This is why the structure of the limited company has its distinct advantages, and the legal protection comes along with this business structure for the case of business assets and finances. This allows the assets of a shareholder to be protected when the company is going through a hard financial time or legal issues. However, the shareholders still stand accountable for the amount of finances that they have invested in the limited company. Moreover, a limited company can be a public limited company or a private company. Both cases are different from each other, and the regulation and public discourse will also be handled differently in this regard. Before moving to learn how to set up a a limited company, first find out whether or not it is the right business structure for you. How to Set Up a Limited Company? In this section, we have provided a step-by-step explanation of how to set up a limited company in the UK. 1- Find out the Right Structure for Your Business When selecting a business structure, consider a few important factors. If you’re willing to take on personal liability, a sole trader or partnership might be suitable. And if you prefer limited liability protection, a limited company or LLP might be a better fit. If you plan to scale your business quickly, a limited company or LLP might provide more flexibility and access to funding. Consider the tax implications of each structure and choose the one that minimises your tax burden. If you prefer a straightforward administrative process, a sole trader or partnership might be more suitable. Ultimately, the right business structure for you will depend on your unique circumstances, goals, and priorities. It’s essential to consult with a professional advisor, such as an accountant or solicitor, to determine the most suitable structure for your business. 2- Decide a Limited Company Name Your company name will be a key part of your brand identity, and it will be used on official documents, marketing materials, and online platforms. Before you start brainstorming company name ideas, it’s essential to understand the rules and regulations surrounding limited company names in the UK. Keep in mind that your company name must be unique and not identical to any existing company name on the UK Companies House register. Your company name must end with “Limited” or “Ltd” to indicate that it is a limited company. Certain words, such as “Royal” or “Bank”, are considered sensitive and may require special permission to use. Before you finalise your company name, it’s essential to check its availability on the UK Companies House register. You can do this using the Companies House website or by using a company formation agent. Use the Companies House website to search for your desired company name. Check for similar company names that could be confused with your desired name. Use online tools to check the availability of your desired company name as a web domain and social media handle. 3- Choose your Company Director There should be one director for a limited company, at least. The main responsibility of the director is to run the business and day-to-day activities. They need to ensure that the reports and accounts of the company are being prepared accurately. The age of the director should be at least 16 years or more than this figure, and all qualifying requirements must be met by the director. 4- Prepare Documentation ‘Memorandum of association’ and ‘articles of association’ are the first ones to be prepared as the company documentation. This plays the role of a legal statement that is signed by all the guarantees of the company along with the initial shareholder. This means that all the guarantors and shareholders agree to form this limited company. You can also use the standard article of your company, and this will be required when you go to register your company. 5- Do Company Registration with Companies House Finally, register your limited company with the companies house. The corporation tax is also set up at the time of registering with a company house in the UK normally. The case of a dormant company will be different here. After the registration process is successful, you will get a certificate of incorporation. This will indicate that a limited company with your chosen name exist, and other relevant numbers …

Read more
register a company for PAYE

When Do I Need to Register as an Employer and How Do I Register?

20/01/2023Accounting , Business , Finance , Payroll & PAYE

When you are in the UK and working as an employer of the company, before you plan to hire employees for your company services, you will have to register with HMRC normally. This is also a requirement even when you are taking the services of subcontractors for your construction work. This turns out to be beneficial if you learn the basics of how to register a company for PAYE. This has become a must-have requirement even when you’re hiring yourself as the director of your limited company. Before payday approaches for the first time in your company, you must ensure that you are registered with HMRC. HMRC normally takes a short period of five days to provide you with the employer PAYE reference number. Moreover, this is imperative to mention here that you will not be able to register your company for two months before paying the employees. In some circumstances, you are bound to pay certain employees even before your company is registered with PAYE. In such a scenario you must try to send the late full payment and inform HMRC about it, run the payroll, and save the detail for the full payment submission. People often make mistakes in this procedure which can cause them penalties. To avoid this kind of unfavourable circumstances, you must gather basic information. This post is based on the required basics about how to register a company for PAYE as an employer, what are the required circumstances to get registered, if is there any timeframe for the procedure, and what you should consider before getting registered.   Reach out to one of our professionals to learn how to register a company for PAYE for your employees in the UK. Get in touch and you will be provided instant professional help!   What are the Circumstances Required to Get Registered as an Employer? When you are connected to any one of the scenarios, you are in a position to get registered with HMRC as an employer: You are giving employee benefits to your employees. The employees are in a position to receive the occupational pension, company pension, or state pension. The employees are working through another job as well. You are giving a salary to your employees which is equal to or more than the National Insurance Lower Earnings Limit (in the tax year 2022-2023 this limit is £123 every week). This could possibly be an amount of £533 a month and £6,396 within the duration of a year. Moreover, if you come under the category of business that is in need of hiring just one employee to share the work burden and let us just say you pay an amount of £9.50 for one hour, you will not be required to get registered for PAYE. This is because of the fact that the employee comes under the category of LEL or below it and you can pay such an employee without following any PAYE scheme.   What is the Timeframe for Getting Registered as an Employer? When you find yourself in a position to get registered as an employer, you must try to get it done before the first payday approaches. There must be plenty of time to initiate the process and try to complete it before it’s high time to do it. This is because of the time duration that HMRC requires to finally complete the process and send you the PAYE reference number. HMRC might require a duration of five days to a week for this. Once you have to pay the employees, there is the compulsion of getting registered for two months as well. If you could not initiate the process in time, you do not need to panic over this matter. The government of the UK has the solution updated on the website to solve the problem of paying employees before you are registered.   What are the Things to Consider Before You Start the Process to Register for PAYE? The possible two ways of sending the employee information and the details of payment to HMRC. This belongs to the running of payroll. You could either do it on paper or you can do it online. However, HMRC suggests using online software to share the information with them. Moreover, there are cases of employers who can still avail the opportunity of sending the information through paperwork to HMRC. There is a criterion for who is actually eligible to use the mode of paperwork. Also, consider the advantages and disadvantages of choosing the right medium to communicate details to them. Once you are clear about choosing your option of sending the information online or through paperwork, there are certain things to consider that are given in the following: Keep your national insurance number with you. You must know the date when you received your payment for the first time. The expected beginning date of PAYE. The number of employees hired. What is the nature of your business? The basic contact details like your email address and your phone number. Your name and personal and office address.   The Bottom Line Now that you have gathered a fair amount of information about how to register a company for PAYE, we can bring the discussion towards wrapping up. When you are carrying out a business in the role of an employer,  it comes with a lot of responsibilities in the UK to be followed. One of such responsibilities is to get registered with HMRC for the PAYE scheme so that you can pay your employees following the rules of this scheme. This is not mandatory in many cases where there is no need of hiring more than one employee or the salary of the employee is below the level of LEL.   Get in touch with our young, clever and tech-driven professionals if you want to choose the best guide for registering a company for PAYE in the UK  for your employees.    Disclaimer: The information about how to register a …

Read more
What is an Annual Return

What is an Annual Return? – A Beginner’s Guide

02/09/2021Limited Company , Tax Issues

Every year, as a registered company owner in the United Kingdom, you must file your annual return to Companies House. In this article, we’ll go over what is an annual return, what information you’ll need, and what penalties you might face if you submit it late.   Whether you’re just starting or have been in business for a while, our Chartered Accountants can help you build your business. So don’t hesitate to get in touch with us now!   What is an Annual Return? It is a document which summarises the general facts about your company, including: The nature of a company’s operations Your registered office address as well as your SAIL address Share capital Contact information Directors’ information Shareholders’ information Your annual return, as the name suggests, must be filed with Companies House every year. You have 12 months to complete your yearly return; however, you can submit your information more than once during that time. This allows you to update business information without worrying about missing deadlines. You can avoid the delay by filing the most up-to-date company information first. Then, to give correct and up-to-date information, you can file a new return with Companies House detailing the modifications or updates. Remember to keep your annual returns separate from your tax return and your company’s annual accounts. You don’t need to file the one because it’s not the same as the other.   Information to Include in the Annual Return The information that needs to be included in your annual return is as follows: Name, DOB, residence, and other details about the company secretary and directors. Your company’s contact information, If there is no other address, records will be stored at the registered address and single alternative inspection location (SAIL). The type of business you have (public or private) and the shares it issues. You must submit information to your stockholders in specific cases. Information about the most important business activity. To describe what your company does, you must choose your principal business activity from a catalogue of SIC (Standard Industrial Classification) codes.   The Formula of Annual Return The Formula of Annual Return is: Annual Return= Final Value of Investment – Initial Value of Investment / Initial Value of Investment * 100   Unable to calculate your annual returns? Let our professionals handle this!   Company Owners are Legally Obliged to File an Annual Return If you are an owner of a company, you are legally required to file an annual return on time, and in case you fail to, you may be charged with a penalty. You can see late filing penalty fees from the Government of the UK.   File your Annual Return Online  Through the Companies House WebFiling, you can easily file your annual return. It will only charge you around £13, and you can pay it through a credit card or PayPal. To use this service, first, you need to get registered with Companies House for WebFiling.   Grow your Business with CruseBurke! We hope you now have a basic knowledge of annual returns after reading this blog. Besides this, we know that you’re busy with your business and have no time to handle company accounts, taxes and reports. Let us do that! CruseBurke is one of the UK’s driving accounting firms with a group of qualified bookkeepers, chartered accountants, and tax specialists. We solve your business problems with the best possible solution and take your business to another level. We provide accounting services for small businesses, startups, sole traders, contractors, partnership & LLP, and landlords. Get an instant quote now for these services!   Disclaimer: This blog contains general information about annual returns.

Read more