Filleted, Abridged and Micro Entity Accounts
All limited companies must file Statutory Accounts at the end of each financial year. However, depending on the size of your business, you may not be required to file your full accounts. Many businesses historically would file ‘Abbreviated Accounts’, although this option was removed in 2016.
Now, there are three alternatives to filing full accounts for businesses defined as ‘small’. A business is small if it meets any two of the following criteria:
- An annual turnover of £10.2 million or less
- A balance sheet total of £5.1 million or less
- 50 employees or fewer
Filleted Accounts explained
Filleted Accounts are an option for any business that does not wish to file its full details with Companies House. It allows for companies to decide what information they want to prepare for their members – which could be full accounts, abridged or micro entity versions – and then remove some of that information before it is filed with Companies House – specifically removing the directors’ report, the profit and loss account and any related notes. It simplifies the filing process, without leaving members or HMRC without their key information.
Abridged Accounts explained
Whether you decide to fillet your accounts or not, there are certain key elements of your accounts that cannot be removed. And under the new regulations, small companies must now prepare the same set of accounts to be filed publicly as with its members. Small companies can still choose to abridge elements of the accounts – the balance sheet and the profit and loss account – but they must do so for both its members and Companies House, so you need to decide this in advance and all shareholders must approve this decision each year.
Micro Entity Accounts explained
Designed for the smallest of limited companies, filing as a ‘micro entity’ allows you to prepare accounts with even less detail than other businesses, and be exempt from preparing a directors’ report. To qualify, these businesses must meet two of the following criteria:
- A turnover of £632,000 or less
- Less than (or equal to) £316,000 on the balance sheet
- 10 employees or fewer
If your business is defined as small by any of the above criteria, we can help you prepare the required accounts without unnecessary detail.