Accounts And Reports And Audits

Part 15 of the new Act deals with accounts and reports (sections 380 to 474) and Part 16 with audit (sections 475 to 539).

The majority of these sections came into effect on 6 April 2008. It is worth mentioning however that a number of these sections are effective for accounting periods beginning on or after 6 April 2008, therefore you may not see the full effects of some of these changes until April 2009 year ends and onwards. Other changes are now fully in force.

Shorter filing deadlines

The new Act reduces the period available to file accounts at Companies House:

New size limits - is your company small or medium-sized?

January 2004 saw the definition criteria for small and medium-sized companies and the audit exemption limit rise significantly, meaning that many more companies could benefit from the exemptions available. Subsequent changes meant that many small financial services companies that were previously prevented from doing so could also benefit from these exemptions.

The limits have been increased again and they apply to accounting periods that begin on or after 6 April 2008 as follows:

Qualification depends upon the company meeting at least two of the three relevant criteria.

These limits are important as they determine whether a company can benefit from:

• the preparation of simpler accounts

Comment A small company can take advantage of exemptions from certain disclosures in its accounts and can make use of simpler accounting standards to prepare its accounts. Some companies do however continue to be prohibited from taking these advantages, including certain financial services companies.

• filing abbreviated accounts on the public record at Companies House

Comment There had been early indications that the government intended to abolish the option for small and medium-sized companies to file abbreviated accounts at Companies House. However these were not realised. Unfortunately this option is of less value to medium-sized companies generally and they will now also have to disclose turnover in their abbreviated accounts.

• audit exemption.

Comment There are differing views on the value of the audit process to owner managed companies. The decision for you and your business is clearly a personal one. If your company now falls under the higher audit threshold this will provide us with the opportunity to provide you with a more flexible service.

Higher group limits - but do you now need to prepare group accounts?

The limits that apply to groups of companies have also been increased:

Qualification again depends upon the group meeting at least two of the three relevant criteria, although the group may qualify on the basis of either the net or gross figures.

Higher late filing penalties

The penalties associated with late filing of annual accounts at Companies House have also been increased:

The higher penalties will be introduced from 1 February 2009 and if you file accounts late under the new Act in two successive years the penalties will be doubled. The higher penalties not only apply to April 2009 year ends and onwards, filed under the provisions of the Companies Act 2006, but also to accounts filed late after 1 February 2009 prepared under the Companies Act 1985.

We offer a comprehensive service to all types of businesses and individuals, and have the benefit of membership of the UK200 Group of Practising Accountants, enabling direct access to expertise in areas outside our normal work.

Regulated to carry on audit work for a range of investment business activities by the Institute of Chartered Accountants in England and Wales

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