Limited company accounts: what you file, where, and by when

Limited company accounts are the yearly financial statements a company must prepare for each financial year: a profit and loss account, a balance sheet signed by a director for the board, and notes. They go to Companies House, to the shareholders, and to HMRC as part of the Company Tax Return. A company that has not traded still has to file (GOV.UK, life of a company: accounts).

What must a limited company file every year?

Two separate filings do two different jobs, and owners often confuse them. Accounts tell the public register how the company stands. The Company Tax Return, known as the CT600, tells HMRC how much Corporation Tax the company owes. Both are built from the same bookkeeping, but each has its own deadline, its own recipient and its own penalties.

• Statutory accounts to Companies House, with copies to shareholders and anyone entitled to attend general meetings.
• Company Tax Return (CT600) to HMRC, with the accounts attached. The Corporation Tax calculation is part of this filing.
• Payment of Corporation Tax, or a notice to HMRC that none is due.
• Confirmation statement to Companies House, a separate annual check that the company's details on the register are right.

The directors carry the responsibility. GOV.UK states that the directors of every company must prepare accounts for each financial year and that the board must approve them before they go to members. An accountant can prepare everything, but the directors sign.

What are the deadlines for company accounts and the CT600?

The dates depend on two periods that are often, but not always, the same: the financial year used for Companies House and the accounting period used for Corporation Tax. Work them out from your own year end. A company with a 31 March year end, for example, must file accounts at Companies House by 31 December of the following calendar year, which is nine months after the year closes.

What are the penalties for late filing?

Companies House penalties for a private company are automatic and fixed by how late the accounts are: £150 up to one month late, £375 from one to three months, £750 from three to six months and £1,500 beyond six months. If accounts are late in two financial years in a row, the penalty is doubled. Failing to deliver acceptable accounts on time is also a criminal offence for the directors, and the register can strike off a company that does not comply.

HMRC has its own set. GOV.UK's current table for a late Company Tax Return shows £200 at one day late and another £200 at three months, with a tax-based charge of 10% of the unpaid tax from six months and again from twelve months, and the £200 penalties rise to £1,000 each if the return is late three times in a row. These are separate from Companies House fines, so one late year can produce both. Keeping no accounting records at all can bring a fine of £3,000 from HMRC, or director disqualification.

What Corporation Tax rate does a limited company pay?

GOV.UK sets the small profits rate at 19% for companies with profits of £50,000 or less. Companies with profits above £250,000 pay the main rate of 25%. Between those two figures, Marginal Relief may apply, which gives a gradual rate rather than a cliff edge. The £50,000 and £250,000 limits are reduced for short accounting periods, and they are shared where a company has associated companies.

Tax on the company is not the whole picture. Salary and dividends paid to directors are taxed on them personally, and dividends cannot be deducted before Corporation Tax. We compare the combined position in our sole trader or limited company comparison, and the personal side of the owner's own return is covered on the Self Assessment page.

Can a small company file micro-entity accounts?

A company qualifies as a micro-entity if it meets any two of three tests: turnover of £1 million or less, £500,000 or less on the balance sheet, and ten employees or fewer, per GOV.UK's current guidance. Charities and some financial firms are excluded. Check your own year against the dates on the page, because these limits have been raised in the past and older web pages still quote the earlier ones.

A micro-entity can prepare simpler accounts to the statutory minimum and send only a balance sheet to Companies House. The rule that surprises owners is that the full statutory accounts still go to shareholders and to HMRC with the tax return. Filing less at Companies House therefore does not mean less preparation.

How do you choose an accountant for a limited company?

Look for an accountant who works with companies of your size and sector, and who tells you in writing what their fee covers. Two firms quoting for the same company can mean very different things, so ask what is in the year-end price and what costs extra. A tidy bookkeeping set, with bank reconciliations done monthly, makes the year-end faster and cheaper whoever you choose.

Before you instruct anyone, check their registration. Chartered and certified accountants are listed on the register of their professional body: ICAEW, ACCA, CIMA, AAT, ATT or CIOT. Search the body's own site for the person and the firm and confirm membership is current. Firms are matched to those registers before they are listed here, and you can browse by area on the cities page or find further explainers in the guides.

1. Confirm the accountant and the firm on a professional body's register.
2. Ask for a fixed fee in writing covering accounts, the CT600 and the Companies House filing.
3. Ask who submits the confirmation statement and who tracks the Corporation Tax payment date.
4. Ask how and when they need your bookkeeping, and what happens if you miss that date.
5. Ask whether they will explain the figures before you, as a director, approve and sign them.
6. Ask what they charge if HMRC or Companies House writes with a query.