Accounts and returns


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You can read comments made since the start of the Red Tape Challenge in April 2011 below.

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These regulations set out the content, form and auditing requirements of the financial accounts and other reports that companies have to produce.

You can find the regulations that relate to accounts and returns below to the left.

The Companies Act 2006 (Transfer of Audit Working Papers to Third Countries) Regulations 2010

Amends provisions in Companies Act 2006 on the transfer of audit working papers to third country audit regulators. Implements Commission Decision under the Audit Directive.

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EU

The Companies Act 2006 (Accounts, Reports and Audit) Regulations 2009

Implements EU Accounting Directives.

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EU

The Companies Act 2006 (Annual Return and Service Addresses) Regulations 2008

Details the information to be provided in the annual return of a company and prescribes conditions to be met by a service address (as defined in section 2 of the Companies Act 2006).

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EU Domestic

The Statutory Auditors and Third Country Auditors (Amendment) (No. 2) Regulations 2008

Amends regulations on registration of auditors of companies outside the European Economic Area which issue securities on UK markets.

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EU

The Large and Medium-sized Limited Liability Partnerships (Accounts) Regulations 2008

Sets out the form and content of accounts for medium and large sized LLPs. Allows abbreviated accounts for mediums.

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Domestic

The Small Limited Liability Partnerships (Accounts) Regulations 2008

Specifies the form and content of the accounts of limited liability partnerships (LLPs) who can take advantage of the small LLPs regime.

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Domestic

The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008

Applies accounting and audit rules from Companies Act 2006 to LLPs.

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Domestic

The Accounting Standards (Prescribed Body) Regulations 2008

Establishes the Accounting Standards Board under the articles of association of The Financial Reporting Council.

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Domestic

The Companies (Defective Accounts and Directors’ Reports) (Authorised Person) and Supervision of Accounts and Reports (Prescribed Body) Order 2008

Establishes the Financial Reporting Review Panel under the articles of association of the Financial Reporting Council.

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Domestic

The Partnerships (Accounts) Regulations 2008

Applies 4th and 7th Company Law Directive accounting framework and Audit Directive to those partnerships and limited partnerships where all members have limited liability.

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EU

The Statutory Auditors and Third Country Auditors (Amendment) Regulations 2008

Corrects errors in the Statutory Auditors and Third Country Auditors Regulations 2007.

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EU

The Statutory Auditors (Delegation of Functions etc) Order 2008

Delegates most of the Secretary of State’s functions under Part 42 of the Companies Act 2006 (statutory auditors etc) to the Professional Oversight Board of the Financial Reporting Council.

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EU

The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008

Specifies the form and content of the accounts and reports of companies other than for the small companies regime.

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EU

The Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008

Defines “small companies regime” including the form and content of the individual accounts.

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EU

The Companies Act 2006 (Amendment) (Accounts and Reports) Regulations 2008

Raises thresholds for qualifying as a small or medium-sized company or group for certain accounting and audit exemptions.

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EU

The Companies (Summary Financial Statement) Regulations 2008

Enables companies to send out summary financial statements in place of their full accounts and reports.

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Domestic

The Companies (Revision of Defective Accounts and Reports) Regulations 2008

Sets out requirements for preparing revised annual accounts, directors’ reports, directors’ remuneration reports and summary financial statements.

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Domestic

The Independent Supervisor Appointment Order 2007

Appoints the Professional Oversight Board as Independent Supervisor of the Auditors General.

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EU

The Statutory Auditors and Third Country Auditors Regulations 2007

Completes the UK’s original implementation of the Audit Directive.

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EU

The Companies (Principal Business Activities) (Amendment) Regulations 2002

Amends a form and prescribes the system of classifying business activities in its annual return using the Standard Industry Classification 1992

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Domestic

The Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002

Allows creditors to apply statutory interest rates on certain debts.

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EU

The Late Payment of Commercial Debts Regulations 2002

Repeals the Secretary of State’s power to specify excepted categories of contracts where late payment interest is not to be payable; and the corresponding Order.

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EU

The Companies (Principal Business Activities) (Amendment) Regulations 1996

Prescribes the system of classifying business activities in its annual return using the Standard Industry Classification 1992.

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Domestic

The Companies Act 1985 (Audit Exemption) Regulations 1994

Exempts small companies from having their accounts audited under the Companies Act 1985. Includes consequential amendments to other legislation still in force.

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Domestic

Tell us what you think should happen to these regulations and why, being specific where possible:

75 responses to Accounts and returns

  • Nigel Hughes said on February 24, 2012 at 11:07 am

    Radically simplify the disclosures required in small company accounts, or, as the next best thing, implement the recommendations of the Company Law Review Committee in respect of the format of small company accounts – it was well thought through, but completely ignored when CA 2006 was introduced.

    Make sure HMRC and Companies House talk to each other about the development of formats for online submissions of company accounts – the Companies House balance sheet format works well, HMRC’s version is woefully inadequate – why didn’t they talk to each other?

    If the format of accounts is to be determined by Company Law, what purpose do the AB’s standards serve?
    If the format of accounts can be delegated to a standard setting body – as with IAS accounts – what purpose do the Regulations serve? Surely we should have one thing or the other, not two sets of rules.

  • Shaun Jones said on February 23, 2012 at 4:29 pm

    I have to register with government gateway for a number of reasons, including VAT, Corporation tax, individual tax. This results in a number of unique references, id’s and passwords – This could be simplified and access through a single portal designed for ease; or at least made an option for businesses who don’t want such complications.

    Also, registering a Ltd company with companies house does not result in the appropriate authorities being notified, and as such further notifications are then needed – this could be made more efficient by being prompted to answer questions about corporation tax, vat etc. a single government gateway id could then be sent out to the company.

    When registering our company with HMRC they have asked us tomake returns for years our business was neither registered nor operating. When we phoned and eventually spoke to someone, they simply said make a nill return – how often does this happen and why is it at all necessary? HMRC should have cancelled the request to make such returns, a nill return is not helping anyone.

  • Ioan Lewis said on February 16, 2012 at 11:38 am

    The tax system is particularly burdensome. So many different taxes with different rates and rules. It makes the whole sytem very dificult for sme’s and the self employed leaving many open to fines and penalties due to ignorance or mis-understanding rather than dishonesty. many forms of tax can be scrapped and streamlined with clearer guidance.

    Comment Tags: Tax

  • Alex Raistrick said on February 14, 2012 at 12:27 pm

    1. When filing the Annual Return for our plc company we were told to include a list of all our material subsidiaries within the return at the back as an appendix. However, as there is no function for us to efile this list or webfile, we had to paper file it. This in turn cost us more money than it would to efile/webfile. It would make sense for there to be this function as paper filing costs us more time and money and is not as safe from fraud.

    2. Why is it necessary to file dormant accounts when nothing changes or is in them of any real note? It would be much easier if this were part of the annual return for instance or there is an option to state no chanegs to teh accounting records.

    3. When filing our monthl SH01 form (Return of allotment on shares) I have to state the amount paid on each share including the share premium. I feel the share premium information is not really needed and is of little or no interest to anyone looking at the SH01. The calculation of this is an added burden which is not needed and takes up time each month to calculate.

  • Sam said on February 13, 2012 at 12:24 pm

    Why are small companies not allowed to file abbreviated accounts for corporation tax returns anymore? It just adds even more work and cost to running a company.

    Comment Tags: Corporation tax

  • Ian Thompson said on February 12, 2012 at 11:29 am

    I am an accountant and have been for 42 years. I have seen it all. When I started, there was far less regulation as we all know but what there was , was far more effective and meaningful. All limited companies had to be audited. I carried out hundreds of audits for all sizes of companies. They did not cost the companies a lot and they were well worth doing. In the process of the audit I learned that in MOST cases the records were well kept . Partly because the officers of the company knew that they were going to be audited & therefore the job would cost less with good records & partly because the law required it and there would be consequences if the records were poor or false. NOW this lot does not apply. MOST of the companies for whom I act have terrible records (although I believe they are still better than most because I guide them to continuosly improve) because they cannot be bothered and they believe that there is no need for good records. One major cause is also the fact that people are far worse educated than they were and have far less respect for their responsibilities. The lack of audits is just one area which encourages these people to not care. Better education and more audits would tidy up a lot of companies and even make them more profitable as they become more aware of their mistakes and responsibilities to trade more respectfully and have some pride in their organisations. THE TAX TAKE would also be higher. I could go on. and on………………….

  • Kevin M said on February 9, 2012 at 2:22 pm

    Fines for late submission of annual tax returns should be net profit related .

  • peter preston said on February 9, 2012 at 12:15 pm

    Submitting a seperate Annual Return AND Accounts for a dormant company is ludicrous. Submitting seperate Accounts to Companies House AND HMRC is also wasteful, time consuming and complicated for small businesses.

    Sharing data between the departments would be the most logical action, and in the 21st century it is an absolute must. A single submission for both Annual Return and Accounts would also ease the burden on small businesses.

    I have been fined for missing the deadline for acounts that equate to zero turnover: how ridiculous is that? It looks like civil service revenue creation to me.

  • simon studd said on February 9, 2012 at 10:38 am

    The requirement for dormant companies to file accounts serves no purpose and should be abolished. Instead, the annual return should explain what dormant means and have a box to tick if the company is dormant. The escalating fines for failing to file dormant accounts are not proportionate.

    Comment Tags: accounts and returns

  • John Winder said on February 7, 2012 at 6:59 pm

    It really is an antiquated and bureaucratic requirement to file accounts for small concerns. Comments about credit-worthiness are noted but surely a company that is keen to maintain this will continue file accounts for the public record. Those that choose not to file will understand that their ability to seek credit may be hampered. Of course, in these times of electronic filing it is not such an onerous task to depatch a copy to Companies House but the penalties levied for lateness or want of form in the accounts, are ridiculously high and bear no relationship to what really is at stake for being late. The cynic might think it’s just another revenue raising device.

    Comment Tags: Penalties

  • philip king said on February 3, 2012 at 9:03 am

    Removing the requirement to file accounts will be damaging. Businesses need numbers to manage their own business and the absence of information will discourage the supply of trade credit. Information enables business, reducing it will stifle economic growth and recovery

    Comment Tags: accounts, credit, supply chain

  • Robert Spencer said on January 31, 2012 at 8:06 pm

    why not abandon the requirement for small companies turning over less than 1 million to lodge accounts
    The argument that it helps credit agencies is no justification .. anyone running or dealing with small companies asks for two trade references

  • Robert Spencer said on January 31, 2012 at 9:39 am

    Stop fining companies for being late with their accounts. We are a small company .. our accounts were 1 day late at Companies House even though being posted in good time..We are not sure we even believe they were late .. These fines are huge and unjustified and just a way of making money .. it makes you view companies house with deep mistrust

    Comment Tags: Companies House Fines

  • Robert Spencer said on January 31, 2012 at 9:35 am

    Annual Returns have now got to a ridiculous length.. Why not give companies the opportunity to file a short form return.. confirming that no changes have taken place since the date of the last full return and require full returns every 5 years

    Comment Tags: Annual Return

  • Edward Beale said on January 30, 2012 at 11:18 am

    Accounts are complicated by the requirement to use values other than historic cost in the statement of financial position and then to record movements in those values in profit and loss or OCI. Notes are then full of clutter trying to explain what has happened.

    iXBRL could be utilised to simplify matters. Accounts can be prepared on an historic cost basis with relevant fair values disclosed in the notes along with a reconciliation of the movement in those fair values. iXBRL tagging of such fair values would allow users of accounts who are interested in a statement of financial position showing fair values to create such a statement.

    This would reduce the cost of preparation of accounts while at the same time making them easier for the non-expert to understand and use, and would not reduce the information available to more sophisticated users of accounts.

  • mark said on January 27, 2012 at 11:47 pm

    I set up two dormant companies to protect trading names and have to file dormant company accounts and annual returns every year even though I’m not trading.
    I’ve forgotten to file accounts a few times when I’ve had difficult moments in life. Companies House continued to send out postal reminders for years (if you were lucky) whist the rest of the planet converted to e-mail about 10 years ago. This not only wasted paper, postage costs and taxpayers money but also set a very bad example. They have only just introduced e-mail reminders recently and it took them years to switch to web filing.
    The fines are draconian and tiny dormant companies are penalised with the same fines as corporate giants, probably in a blatant attempt to raise coffers for Companies House and the government.
    I wonder what the salary of the CEO of Companies House is. I bet it’s a lot more than what David Cameron earns!

    • Robert Blanks said on February 4, 2012 at 11:49 am

      I see no reason for the annual filing of dormant accounts. Once a company registers as dormant the only obligation should be the filing of an appropriate statement when it ceases to be dormant after which it joins the trading company regime.

      Comment Tags: Dormant companies

  • Haren Visavadia said on January 15, 2012 at 2:15 pm

    HMRC should abolish the need for iXBRL format.

    The requirement for a statutory accounts should be removed and replaced with the following:
    Setting up an Accounting Policy
    Creation of Business own Chart of Accounts
    Choice to implement Cash or Accrual Accounting

    Comment Tags: reporting

  • On The Spot Tax Accountants said on January 12, 2012 at 12:36 pm

    Online filing is great. It’s the time to get codes from all the various departments which isn’t. The codes take ages and there are too many of them. Clients are bound to miss one or two of them and we have to start again. For corporation tax, when you’ve managed to get the correct code (often two are sent at the same time) it takes 5 working days after that for the company to show up online. Why does it take this long. By that stage all the ID and fraud checks have been done. Surely?

    Comment Tags: Tax Simplification

  • Kevin Unwin said on October 31, 2011 at 12:20 pm

    The late filing penalty for late submission of accounts on limited companies.
    As we are just a community which was set up by a developer as a management company. We as residents have felt the force of the Law in an non realistic fine, which we have had to pay, as there seems no quarter given due to how the law see’s fit.these were unforseen errors due to postage going a stray and various changes of Directors, being a community.I feel that the fine does not take into account that residents have to run this non profit making concern with no remuneration to them selves, also not being that experienced in being a director! The monies are collected from residents to put forward to maintenace of surrouding areas and nature trails plus up keep of roads and pavements etc. All taking the burden from goverment to have to apply for grants. We also feel that Companies house could be a little more helpful towards community set ups like this, as fines just put further burdens on the already stretched community Bank account. Best regards

    Comment Tags: Companies House Fines

  • Jonathan said on October 25, 2011 at 9:46 am

    All accounts filed with Companies House should be subject to an audit to ensure that the figures quoted in the accounts are accurate and true. As it stands a company who has not traded can file full accounts and obtain an excellent credit rating. With an excellent credit rating (based on accounts filed with Companies House) a Limited company can be used as a vehicle for fraud by obtaining goods and never paying for them.

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