What is included in UK statutory accounts?

Statutory accounts decoded for small businesses

In this blog, we explore the main things included in UK statutory accounts. With a partner like Nutshell Accounts, the complexity and stress of compiling accounts are taken away from your to-do list, so you can focus on other important tasks. Let’s dig in!

Understanding UK Statutory Accounts

Statutory accounts, also known as annual accounts or financial statements, are a comprehensive report on your company's activities throughout the preceding year. They're prepared at the end of each financial year to report various financial metrics and related disclosures for filing with Companies House. In the UK, all private limited companies must prepare these accounts according to law.

Statutory accounts provide your shareholders with transparent information regarding the company's financial performance and ensure compliance with financial reporting standards. End-of-year accounts can be complex and time-consuming for small businesses, but with Nutshell Accounts onboard, you never need to worry. 

What are the key components of statutory accounts?

Statutory accounts include:

• Company information section
• A balance sheet
• A profit and loss statement
• Notes to the accounts
• A directors’ report with company information (unless you’re a ‘micro-entity’)
• For larger companies, a cash flow statement may also be required.

Company Information Section

The company information section includes your company's name, registration number, office address, directors’ names, and accountant details. You also have a directors’ report, which provides a summary of your main business activities, performance, future outlook, dividends payable, and directors’ responsibilities. For larger firms, it must be approved by a director and the board. However, smaller companies, defined by a turnover of £10.2 million or less, a balance sheet of £5.1 million or less, and 50 or fewer employees, are exempt from this.

Balance Sheet

A balance sheet gives an overview of your company's assets, liabilities, and shareholder equity at the end of the year. Assets can be current or non-current and range from land and buildings to bank accounts. Liabilities may include bank loans, corporation tax, VAT, payroll liabilities, etc. Equity includes retained earnings, share capital, and share premium.

Profit and Loss Statement

The profit and loss statement shows your company's income and expenditure during the accounting year, including turnover, cost of sales, gross profit, administrative expenses, operating profit, and profit for the financial year. This statement helps your business identify profitability, cost reduction opportunities, profit trends, and profit margins.

Cash Flow Statement

A cash flow statement, not mandatory for smaller companies, reveals the inflow and outflow of money within a specified period, including cash flow from operations, finance, and investment.

Notes to the Accounts

Lastly, you have the ‘notes to the accounts’, which provide additional details for balance sheets or profit and loss accounts, including accounting policies used, the basis of preparation, the policy for recognising turnover, and the method of depreciation.

Who do you share the statutory accounts with?

You have to 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

Deadlines for UK Statutory Accounts

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

Nutshell Accounts: Your Expert Partner in Statutory Accounts

Here at Nutshell, we take away the headache of statutory accounts; you can rest assured that you’ll meet all the statutory requirements and not incur any penalties. Annual accounts become public records at Companies House, so they must be carried out correctly as they could influence your business relationships with other companies.

At Nutshell Accounts, we serve businesses across the UK, catering to different company sizes and industries. Our expertise includes providing necessary financial information based on company size and operations. Additionally, we prepare your accounts for HMRC along with your company tax return. Our clients trust us to manage their accounts and tax returns efficiently, year after year.

Interested in finding out more? Call or Email Jenny today!

Sources:

https://www.gov.uk/annual-accounts

https://www.gov.uk/prepare-file-annual-accounts-for-limited-company