Tax & admin Fred Heritage · 5 October 2016
New accounting rules could see small company filings rejected
A leading accountancy and finance association has warned smaller UK company owners that they could see the accounts they file with Companies House rejected due to confusion over new filing options. According to theinstitute of Chartered Accountants in England and Wales (ICAEW), recent changes to UK company law have resulted in a spike in rejections among small firms which register accounts with the government’s Companies House service, as owners fail to navigate new rules. The main point of confusion has centred on whether small business owners are still able submit shorter, so-called abbreviated? versions of their accounts, such as simply a company balance sheet, signed by a director. Under the new system, small company owners can still submit abbreviated accounts to Companies House for periods ending before 31 December 2016, provided they have not already chosen to adopt the new regulations. However, the new rules remove this option for accounting periods beginning on or after 1 January 2016. There are certain account filing options that remain open to small UK business owners. The new system introduces a file what you prepare? model, whereby accounts filed with Companies House should mirror those prepared for company members. Smaller firms remain able, however, to submit filtered? accounts, which don’t need to include a profit and loss account or a director’s report. Also open to small companies is the ability to file abridged? versions of balance sheets, profit and loss accounts, or both. Commenting on the changes, head of the ICAEW’s financial reporting arm Nigel Sleigh-Johnson indicated that very few businesses have used this option so far, and that most continue to file abbreviated accounts under the old rules.
ABOUT THE EXPERTFred Heritage
Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.