3 Mandatory UK company filing obligations
Have you recently registered a new company in the UK and wondering what are your obligations?
Well, let me clarify first that it's not easy to manage your accounts and file it by the end of the year.
Hence, it is always a good idea to prepare for it since from the start.
Let me list the mandatory obligation you have as a company director:
1. Corporation Tax
2. Annual accounts
3. Confirmation statements
Yes, three simple documents you have to file every year to maintain your company presence in the UK.
Now if you want to learn how I do it without any accountant then feel free to read further. If not you have already got your answer.
Corporation tax return
What is corporation tax, and how is it filed?
Corporation tax (sometimes referred to as ‘company tax’) must be paid by all companies that make a profit. This includes not-for-profit clubs, co-operatives, other unincorporated associations, charities, and foreign companies with a UK branch or office. Sole traders and LLPs, however, do not need to pay corporation tax.
How do I get a unique taxpayer reference (UTR) for a new company?
Although applicable businesses do not receive a bill for corporation tax, they are required to:
- Register for corporation tax (unincorporated associations should write to HMRC)
- Work out their profit or loss for corporation tax (which is different from the P&L statement prepared for annual accounts) and how much they need to pay
- Ensure they pay any corporation tax owed or report that they have nothing to pay by the deadline (see below)
Deadlines for filing corporation tax
Payment (or declaring nothing to pay): The deadline is normally 9 months and 1 day after the end of the accounting period. The corporation tax period is generally the same 12-month period as that covered by annual accounts, although sometimes they may diverge.
Filing a company tax return: the deadline is normally 12 months after the end of the accounting period.
Consequences of missing any of the annual deadlines
Confirmation statement: Failure to file a confirmation statement is a criminal offence for which directors are liable to prosecution. Furthermore, the company’s credit rating may be affected, and it could potentially be struck off the companies register.
Annual accounts: There are a range of penalties for companies that are late in submitting their annual accounts, starting from £150 and rising to £1,500, dependent on how late they are. Directors are also liable to criminal prosecution if the accounts are late or not delivered. More information can be found by visiting GOV.UK’s Penalties for late filing.
Corporation tax — There are various penalties for failing to meet corporation tax deadlines, starting with a minimum of £100. More information is available on the GOV.UK website.
What are annual accounts?
Company directors are required to prepare accounts (known as ‘statutory accounts’) for each financial year, which will generally include:
- Profit and loss (P&L) statement
- Balance sheet (this needs to be signed by a director on behalf of the board)
- Any additional notes pertaining to the accounts
The purpose of the annual accounts is to provide a general overview of a company’s financial position. For stand-alone companies, these are known as individual accounts. Parent companies may additionally need to prepare group accounts.
Annual accounts should generally be accompanied by a directors’ report signed by a director or company secretary which includes a business review/strategic report; and an auditor’s report (unless there is an exemption from audit).
These annual accounts must be shared with members and shareholders, and the company is also required to file these with Companies House (and, in some instances, with other regulatory bodies).
When are annual accounts due?
A company’s first set of annual accounts must be filed within the first 21 months of its incorporation date. Accounts thereafter must be filed within 9 months of its accounting reference date (ARD), or 6 months after its accounting reference date if it is a public company.
The ARD is the date that the accounts must be made up to. For new companies, the first ARD is always the last day of the month in which its anniversary of incorporation falls. The ARD will remain on the same date each year thereafter, unless the company changes it.
With regards to filing deadlines for annual accounts, a month is considered to begin and end on the same date. Therefore, when a company’s ARD falls on the last day of the month, the filing period ends on the last day of the relevant month.
A new company is incorporated on 25 April 2021. The company’s ARD is 30 April 2022. It has until 25 January 2023 to submit its first set of accounts — i.e., 21 months after the date of incorporation.
A private company with an accounting reference date of 4 May 2021 has until midnight on 4 February 2022 to submit annual accounts to Companies House — i.e., 9 months after the ARD.
A private company with an ARD of 30 April 2021 has until midnight on 31 January 2022 (the last day of that month, rather than 30 January) to submit annual accounts to Companies House.
A couple of important points to note regarding deadlines are:
- Filing deadlines which fall on a Sunday or a Bank Holiday do not automatically move to the next working day — annual accounts must still be filed by the deadline, no matter what the day.
- If the date of sending and delivering annual accounts are different, it is the date on which accounts are delivered to Companies House that is considered the day of filing — not the day on which they are sent. This is particularly relevant if accounts are filed by post.
New companies submitting first annual accounts that cover a period of more than 12 months must deliver them to Companies House within 21 months of the date of incorporation (18 months for public companies). If the first set of annual accounts covers a period of 12 months or less, the general filing deadline applies (i.e., 9 months after the accounting reference date).
Companies that have shortened their accounting period (which is reported at Companies House using form AA01 ‘Change your company accounting reference date’) will have a filing deadline of 9 months from the new accounting reference date (6 months for public companies) or 3 months from the date of receipt of the notice of change, whichever is longer.
How do I file annual accounts?
You can file your annual accounts online with Companies House, or you can send hard copies by post.
Whilst there is no specific requirement for companies to use a professional accountant to prepare annual accounts, directors must ensure that they’re aware of their legal responsibilities, and it is recommended that they seek professional advice.
Do I have to file annual accounts if my company is dormant?
Even if your company is dormant, you still need to submit annual accounts to Companies House. However, provided the dormant company has not had any ‘significant transactions’ during its financial year, you have the option of submitting less burdensome ‘dormant company accounts’.
What is the purpose of a confirmation statement?
All companies — including those which are dormant or not trading — are legally required to submit a confirmation statement (Companies House form CS01) each and every year to Companies House.
Previously known as an annual return, the confirmation statement verifies the current registered details of a company, ensuring that Companies House has all the latest information. The data that this form specifically reports is:
- registered office address
- appointed directors and company secretary
- existing members (shareholders/guarantors)
- People with Significant Control (PSCs)
- Standard Industrial Classification (SIC) codes
- Statement of Capital
- Trading status of shares
When is a confirmation statement due?
Companies are required to file at least one confirmation statement in every 12-month period, known as a ‘review period’. For new companies, this review period begins on the date of the company incorporation. Subsequent review periods begin on the date the last confirmation statement was submitted.
Confirmation statements must be filed at least 14 days following the end of each relevant review period. This is known as the ‘filing period,’ although they can be filed earlier if the company wishes. Submitting a confirmation statement early will automatically reset the 12-month review period.
A new limited company was incorporated on 1 April 2021. The review period began on 1 April 2021 and will end on 31 March 2022. The company should file its confirmation statement by 14 April 2022, at the very latest.
A new company was incorporated on 1 April 2021. The review period began on 1 April 2021 and will end on 31 March 2022. The company decides to submit an early confirmation statement on 4 January 2022. This means that the next review period will run from 4 January 2022 to 3 January 2023. The company should file its next confirmation statement by 17 January 2023 at the latest.
Difference between the confirmation statement and the old annual return
The confirmation statement was introduced on 30 June 2016. Prior to that date, a similar annual filing requirement existed but it was instead called an annual return — and indeed many businesses which have been established for several years are still more familiar with this term.
Although the purpose of both the confirmation statement and annual return is broadly the same (i.e. to ensure any changes to important company details are updated on the public register), there are nevertheless a number of differences:
- Whereas the annual return provided a snapshot of a company at a specific date, the confirmation statement requires the company officials to check and confirm that the information held by Companies House, including that which is not reported using the confirmation statement, is accurate and up to date.
- A confirmation statement is only required to provide details on aspects of a company that have changed since the last confirmation statement. For example, if in the last confirmation statement a company reported that its shares had been transferred to a new shareholder and there had not been any further changes to the shareholders since, then the next confirmation statement would not require the company report its list of shareholders unless the shareholders had changed again.
- The confirmation statement also briefly was used to report a company’s people of significant control (part 5), although this was later removed with the introduction of the dedicated PSC01–09 forms.
Do dormant companies still need to file a confirmation statement?
Yes. Dormant companies, even those dormant for Corporation Tax or dormant according to Companies House, are still obliged to submit their annual confirmation statements.
How to file a confirmation statement
- Check the details of your company currently held by Companies House. You can find a summary of these details on Companies House Service.
- Ensure any details which are out of date are updated. This might include the details of the directors and company secretaries, people with significant control (PSCs), or the registered office address of a company.
- Write up the confirmation statement online or via paper to confirm or update details on a company’s Standard Industrial Classification (SIC) codes, statement of capital, trading status of shares, and shareholder information.
- Pay the annual fee — this is £13.00 for confirmation statements which are filed online or £40.00 if a paper form is used. Payment covers each 12 month ‘payment period’ which begins on the date payment is made. This may well be different from the review period, and it covers the period of time as opposed to each confirmation statement submitted, i.e. multiple confirmation statements can be filed in each payment period without incurring any extra fee.
Note: Even if nothing has changed during the review period, it is still necessary to file a confirmation statement.