Also known as an annual account, a statutory account is a set of financial reports presented by companies at the end of each fiscal year for tax purposes. It is required by HM Revenue & Customs (HMRC) to collect and keep the record of corporate taxes. Preparing a statutory account is a daunting task as it involves maintaining the record of each small expense and payroll. If you’re struggling to prepare a statutory account, read this quick guide on how to make a statutory account until the end.
Getting Statutory Accounts Ready
Every company needs to send a copy of its accounts for each financial year to each member of the company, and file its accounts at Companies House. Every company gets 9 months from their accounting reference date (ARD) to submit their accounts to Companies house. If you file your report late, you may get a penalty of up to £1,500. When you establish your company, your first ARD will be a year later, on the last day of the month you incorporated your company.
In the statutory accounts, the balance sheet demonstrates the value of everything your firm owns while the profit & loss account shows your company’s sales, running costs, and profit made in the financial year.
Depending on the size of your firm, you might need to add an auditor’s and director’s report to it as well.
Filing End-of-Year Accounts
There is a lot of accounting software available in the market that you can use to prepare and file your annual account. You may choose Xero. It is well-known accounting software that lets you keep track of your every expense and create invoices. If you’re a small company or a micro-entity, you can use the CATO (Company Accounts and Tax Online) service that enables you to submit your accounts data to HMRC and Companies House simultaneously.
Can I Create Limited Company Accounts Myself?
Yes, you can, but if you want to produce accurate statutory accounts and file it on time, it’s advisable to hire a reputable accounting firm that can manage all your financial matters. When you hire an experienced accountant, he/she can take a lot of the stress out of filing your accounts with Companies House and HMRC. They can also help you comply with all the legal requirements and avoid penalties. However, it’s essential to understand that even if you hire an accountant, being a company’s CEO or director, you are still responsible for making sure all accounts are accurate.
How to Format Limited Company Accounts
Your accounting software can help you format your accounts accurately and add all the necessary information on it. If you want to be sure that format and information for statutory accounts are accurate, you can check the relevant regulations on the government’s legislation website. Make sure your accounts fulfil with UK accounting standards
If you want to avoid the hassle of preparing statutory accounts, you should work with a reputable accounting firm in the United Kingdom.