Uk Statutory Accounts

UK statutory accounts — small Ltd

Turning a reconciled trial balance into accounts that satisfy Companies House and accompany the CT600.

1. Choose the framework first — it changes the output

FRS 105 is not automatically the right answer just because it is the least work. It forbids revaluation and deferred tax, which can misrepresent a company holding property or carrying material timing differences. If the company has investment property, significant deferred tax, or wants accounts a lender or buyer will take seriously, FRS 102 1A is usually better.

Check the thresholds against the actual figures, and remember they apply on a 2-of-3 basis over consecutive periods.

2. Balance sheet format

FIXED ASSETS
  Intangible assets
  Tangible assets                    (cost − accumulated depreciation)
  Investments
CURRENT ASSETS
  Stock
  Debtors                            (trade + prepayments + other)
  Cash at bank and in hand
CREDITORS: amounts falling due within one year
  Trade creditors, accruals, VAT, PAYE/NIC, corporation tax, director's loan
NET CURRENT ASSETS / (LIABILITIES)
TOTAL ASSETS LESS CURRENT LIABILITIES
CREDITORS: amounts falling due after more than one year
NET ASSETS
                                      ═══════════
CAPITAL AND RESERVES
  Called up share capital
  Profit and loss account             (retained earnings)
SHAREHOLDERS' FUNDS                   (= NET ASSETS)

Net assets must equal shareholders' funds. If they do not, the accounts are wrong — do not present them.

3. Profit and loss

Turnover
  − Cost of sales
= Gross profit
  − Administrative expenses
= Operating profit
  ± Interest / other income and charges
= Profit before taxation
  − Tax on profit
= Profit for the financial year

The tax line must agree the corporation tax computation (uk-corporation-tax). A tax charge that does not tie to the computation is one of the two numbers a reviewer checks first.

4. Year-end checklist

1. Reconcile everything — bank, VAT control, PAYE/wages control, debtors, creditors
2. Stock counted and valued at the lower of cost and net realisable value
3. Fixed assets — additions capitalised, disposals removed, depreciation charged consistently
4. Debtors reviewed for bad debts; creditors for completeness (unrecorded liabilities are the classic year-end understatement)
5. Accruals and prepayments posted, and prior-year ones reversed
6. Director's loan account agreed and its sign checked — an overdrawn account has real tax consequences (s455 charge, and a benefit-in-kind on beneficial loan interest)
7. Dividends — legal only out of distributable reserves, with paperwork. An "dividend" paid from insufficient reserves is not a dividend; it is a loan, and taxed as such
8. Corporation tax computed and posted
9. Comparatives agree last year's filed accounts exactly
10. Net assets = shareholders' funds

Item 7 is worth stopping on: paying dividends out of reserves that do not exist is common in owner-managed companies and is usually discovered a year later, when it is expensive to unwind.

5. Company size — which regime applies

For accounting periods beginning on or after 6 April 2025, meet at least 2 of 3:

Audit exemption for a small company mirrors the small thresholds (≤ £15m / ≤ £7.5m / ≤ 50, 2 of 3). Exemption is not automatic in every case — it is lost if the company is in an ineligible group or regulated sector, or if members holding 10% or more of shares demand an audit. When exemption is taken, the balance sheet must carry the directors' statement claiming it.

6. Full vs filleted vs abridged — three different documents

This is the distinction that causes the most confusion, because "small accounts" means different things to different recipients.

The company prepares ONE set of full accounts. Filleting is a choice about what subset is filed publicly; it is not a different set of books, and it never reduces what members or HMRC receive.

• Members always get the full accounts. Filing filleted accounts does not reduce that right.
• HMRC always gets the full accounts in iXBRL with the CT600. Sending HMRC the filleted version is a filing error.
• Abridged is not the same as filleted and needs unanimous member consent each year — which is why most small companies use filleting and not abridgement.

This is changing — April 2028

From 1 April 2028, under ECCTA:

• Small and micro-entity companies must file a profit and loss account.
• Abridged accounts are abolished — small companies will no longer be able to prepare or file them.
• Companies claiming audit exemption must give an enhanced directors' statement on the balance sheet naming which exemption is claimed and confirming the company qualifies.

So filleting away the P&L is correct advice today and expires in April 2028. When advising, say both: what is permitted now, and what is coming. A client planning on permanent P&L privacy is planning on something that ends.

7. What the public register shows

Accounts filed at Companies House are public. Today, a small company filing filleted accounts publishes its balance sheet and limited notes but not its P&L — from April 2028 the P&L will be filed too.

Tell the user what will be visible. Net assets, share capital and director's loan balances are on a public record that customers, suppliers and competitors can read, and turnover and profit will join them. That is not a reason to misstate anything — it is a reason not to be surprised.

8. Filing

The accounts go to both bodies, separately, on different deadlines, in different formats. The joint service that used to do both at once no longer exists.

iXBRL is machine-readable tagging of the accounts. It is produced by accounts-production software — this skill does not generate it, and hand-tagging is not a realistic path.

Deadlines: 9 months after the ARD (21 months from incorporation for a first period). The confirmation statement is a separate annual filing on its own date — it is not part of the accounts, and believing otherwise causes a late filing every year.

9. Directors' responsibilities — state them

The directors, not the preparer, are responsible for accounts giving a true and fair view, for adequate accounting records, and for filing on time. Late filing brings automatic penalties that escalate, and persistent default can lead to strike-off and disqualification.

Recommend a qualified accountant reviews the first set of accounts, any year with an unusual transaction, and any year where the framework changes.

10. Anti-patterns

• Choosing FRS 105 purely to save effort where revaluation or deferred tax matters.
• Presenting accounts where net assets ≠ shareholders' funds.
• A tax charge that does not agree the computation.
• Comparatives that do not match last year's filed accounts.
• Dividends from reserves that do not exist.
• Missing an overdrawn director's loan and its s455 consequence.
• Treating the confirmation statement as part of the accounts filing — see accounting-uk-ltd/references/confirmation-statement.md.
• Sending HMRC the filleted accounts. HMRC gets the FULL accounts with the CT600.
• Confusing abridged with filleted — abridged needs unanimous member consent every year.
• Promising permanent P&L privacy. Filleting away the P&L ends in April 2028.
• Assuming audit exemption is automatic — an ineligible group, a regulated sector, or members holding 10%+ demanding an audit all remove it.
• Assuming the old joint filing service still exists — it closed 31 March 2026.
• Claiming to produce iXBRL. That comes from accounts-production software.