Company Annual Accounts and Corporation Tax

Your company’s annual accounts – called ‘statutory accounts’ – are prepared from the company’s financial records at the end of your company’s financial year.

You must always send copies of the statutory accounts to:

• all shareholders
• people who can go to the company’s general meetings
• Companies House
• HM Revenue and Customs (HMRC) as part of your Company Tax Return

You have different deadlines for sending your accounts to Companies House and your tax return to HMRC, but you may be able send them at the same time.

If youe company is small, a micro entity or dormant, you might be able to send simpler (‘abridged’) accounts.

How to put together statutory accounts

Statutory accounts must include:

• a ‘balance sheet’, which shows the value of everything the company owns, owes and is owed on the last day of the financial year
• a ‘profit and loss account’, which shows the company’s sales, running costs and the profit or loss it has made over the financial year
• notes about the accounts
• a director’s report (unless you’re a ‘micro-entity’)
• You might have to include an auditor’s report, this depends on the size of your company.

The balance sheet must have the name of a director printed on it and must be signed by a director.

Accounting standards

Your statutory accounts must meet either:

• International Financial Reporting Standards
• New UK Generally Accepted Accounting Practice

Corporation Tax

You must pay Corporation Tax on profits from doing business as:

• a limited company
• any foreign company with a UK branch or office
• a club, co-operative or other unincorporated association, eg a community group or sports club

You don’t get a bill for Corporation Tax. There are specific things you must do to work out, pay and report your tax.

1. Register for Corporation Tax when you start doing business
2. Keep accounting records and prepare a Company Tax to work out how much Corporation Tax to pay.
3. Pay Corporation Tax and reprot by your deadline – this is usually 9 months and 1 day after the end of your ‘accounting period’.
4. File your Company Tax Return by your deadline – this is usually 12 months after the end of your accounting period.

Your accounting period is normally the same 12 months as the financial year covered by your annual accounts.

Profits you pay Corporation Tax on

Taxable profits for Corporation Tax include the money your company or association makes from:

• doing business (‘trading profits’)
• investments
• selling assets for more than they cost (‘chargeable gains’)

If your company is based in the UK, it pays Corporation Tax on all its profits from the UK and abroad.

If your company isn’t based in the UK but has an office or branch here, it only pays Corporation Tax on profits from its UK activities.