In this blog post, our third in a series on UK Limited Companies, we focus on the accounting requirements.
UK Limited Companies must file accounts with Companies House. The first accounts filed generally cover a period greater than 12 months; from the date of incorporation to the last day of the month the company was set up, plus one year.
if a company, XYZ Limited, was incorporated on the 13 October 2015 the first accounts would cover a period from 13 October 2015 to 31 October 2016. All subsequent accounts cover a period of 12 months (e.g., 1 November 2016 to 31 October 2017) unless a request for the account reference date to be changed is made.
A UK Limited Company must file its first accounts 21 months post incorporation (XYZ Limited’s first accounts must be filed on or before 13 July 2017), all subsequent accounts for private companies are due 9 months after the period end (31 July 2018 for XYZ Limited).
Late Filing Penalties
When accounts are submitted after a Company’s filing deadline, a Late Filing Penalty Invoice will be issued by Companies House. The penalty is calculated based on how late the accounts are filed. The amounts for limited companies are listed below:
Period after the Filing Deadline
Less than 1 month
Greater than 1 month but less than 3
Greater than 3 month but less than 6
Greater than 6 months
When the penalised company has also missed the filing deadline for their previous year’s accounts, the above penalty amounts are doubled.
Changing of Accounting Reference Date
A Company can shorten its accounting reference date as often as it likes, the minimum amount that an accounting period can be shortened to is one day. An accounting period can be extended once every five years and the maximum length is 18 months. It is not possible to alter the accounting reference date if the filing deadline has already passed.
The change is actioned by filing a form AA01 with Companies House and preparing a resolution of directors stating the original date and the new reference date.
Once the date has been changed the accounts will be due either 3 months after Companies House are made aware of the change or 9 months after the new reference date. The filing deadline assigned to the company will be the one which provides the greatest amount of time to prepare the accounts.
XYZ Limited is due to file its accounts for the year end 31 October 2017 on or before 31 July 2018, on the 30 June 2018 Companies House accept an AA01 from XYZ Limited requesting the accounting reference date be shortened to 30 October 2017. XYZ Limited’s accounts are now due on the 30 September 2018.
An exception to this rule is a Company’s first accounting period. As the first accounts must be filed 21 months post incorporation, even if the account reference date is changed the date on which the accounts must be filed will not.
Missing an accounts filing deadline affects a Company’s Good Standing with Companies House, leads to a monetary penalty and can result in the directors being prosecuted or the Company being removed from the Register. These issues can be avoided by being aware of a Company’s accounting reference date, preparing the accounts shortly after its period end where possible and filing the accounts well in advance of the its account filing deadline.