Accounting and audits

What information do you need to provide?

In most cases, small and medium-sized companies and limited liability partnerships (LLPs) are entitled to submit abbreviated accounts to Companies House, which means they have to provide less information.

For financial years starting before 6 April 2008, to be a small company or LLP, you must meet at least two of these three conditions:

annual turnover must be £5.6 million or less
balance sheet total must be £2.8 million or less
average number of employees must be no more than 50

For financial years starting on or after 6 April 2008, a small company (not LLP) must meet at least two of the following conditions:

annual turnover must not be more than £6.5 million
the balance sheet total must be not more than £3.26 million

the average number of employees must not be more than 50

For financial years starting before 6 April 2008, to be a medium-sized company or LLP, you must meet at least two of these three conditions:

annual turnover must be £22.8 million or less 
balance sheet total must be £11.4 million or less 
average number of employees must be no more than 250

For financial years starting on or after 6 April 2008, a medium-sized company (not LLP), must meet at least two of the following conditions:

annual turnover must be no more than £25.9 million
balance sheet total must be no more than £12.9 million
the average number of employees must be no more than 250

Small and medium-sized LLPs will be able to take advantage of the higher thresholds for accounting periods starting on or after 1 October 2008.

Even if a company or LLP stops being small or medium-sized through expansion, it will still be regarded as such for one financial year afterwards. If it then reverts to being small or medium-sized the following year, the exemption will continue uninterrupted.

There are special rules for groups of small and medium-sized companies and LLPs whose total overall size falls within the small and medium categories.

Abbreviated accounts can cut costs and save time. You also minimise the information made available to others, especially rivals. When you're a small and growing company you may not want full details of the money you earn and spend to be widely known.

But remember, potential customers, suppliers, investors and lenders may check your accounts before doing business with you.

Recent expansions to the scheme have allowed some small financial services providers and some small businesses, such as home-finance providers, that comply with Sharia Law to take part in the scheme. 

esmartmoney
Content of the articles featured in this digital publication is for your general information and use only and is not intended to address your particular requirements. They should not be relied upon in their entirety and shall not be deemed to be, or constitute advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles. For more information please visit www.goldminepublishing.com Go Back