How to file your company's annual accounts

Introduction

All UK limited companies must prepare and file annual accounts each year. These accounts are submitted to Companies House and, separately, to HMRC as part of your Corporation Tax Return. This often includes submitting financial information relating to balance sheets, profit and loss statements, and supporting general notes. What you need to include exactly depends on your company’s size and status – but in every case, directors are legally responsible for ensuring accounts are accurate and submitted on time.

This guide will provide you with everything you need to know about filing your annual accounts, including how to determine your company's size and a step-by-step guide to collecting and filing account information.

What are annual accounts?

Annual accounts – also known as statutory accounts, financial accounts, or company accounts – are a collection of financial statements and records that provide an overview of a business’ financial activities over the financial year.

These records provide a snapshot of your company’s trading activity and financial performance. You or your accountant can prepare them, and you can use software to help. You must prepare these records in compliance with the rules set out by HMRC and Companies House – this is essential to ensure transparency for any lenders and stakeholders who contribute to the business.

Annual accounts consist of:

• A profit and loss account
• A balance sheet
• Notes
• A director’s report
• An auditor’s report (if your business requires one)

Not all of these documents will be filed publicly, and the documents you submit will depend on the size of your business.

Who must file annual accounts?

In the UK, all limited companies are required to submit accounts to Companies House. If you are self-employed, operating as a sole trader or in a partnership, you do not need to file accounts as you don’t register with Companies House – all relevant information HMRC needs is provided through Self Assessment.

How you go about filing your accounts with Companies House very much depends on the size and status of your business.

Micro-entities

Your business is classified as a “micro-entity” if it meets any two of the following criteria:

• Your turnover does not exceed £632,000
• Your balance sheet does not exceed £316,000
• You have no more than 10 employees

You're likely to have a company that qualifies as a “micro-entity” if you’re at the beginning of your business journey, having only recently incorporated it with Companies House, with a smaller turnover
As a micro-entity, your company is exempt from:

• Audits
• Filing a director’s report
• Filing a profit and loss account

Note that from 1 April 2027, micro-entities will be required to file a profit and loss account in order to comply with Companies House rules.

Small companies

For accounting periods between 1 January 2016 and 5 April 2025, your company will be defined as “small” if it meets any two of the following:

• Your turnover is less than £10.2 million
• Your balance sheet is less than £5.1 million
• You have fewer than 50 employees

However, the rules are changing. For accounting periods beginning on or after 6 April 2025, your company will be defined as “small” if it meets any two of the following:

• Your turnover is less than £15 million
• Your balance sheet is less than £7.5 million
• You have fewer than 50 employees

Smaller companies do not benefit from exemptions. This means they must provide all the necessary accounting information detailed previously, including the directors' notes and auditing notes, unless they are exempt from audits.

Dormant companies

A dormant company is one that has ceased trading activity and incurs no annual profit. Registering your business as dormant means that its legal identity continues to exist, but you do not need to perform annual Corporation Tax returns.

Even if your business has ceased activity, you still need to file dormant company accounts. However, the process is much more straightforward, as you only need to provide:

• A balance sheet
• Statements from the director validating that the company was dormant throughout the accounting period
• Any previous year’s figures (for comparison)
• Certain notes to the balance sheet

Dormant companies are also exempt from audits if they have been dormant since their formation. If a dormant company also qualifies as “small,” then it can take advantage of the audit exemption rule (for a comprehensive list of companies that must be audited, take a look at the list provided by HMRC).

When do you need to file your company’s annual accounts?

Depending on whether it is your first time filing annual accounts for your company, the timeframe for when you need to deliver your accounts varies.

For new private companies, you must deliver acceptable accounts to Companies House (provided they cover a period of longer than 12 months) within:

• 21 months from the date of incorporation
• Or, 3 months from the accounting reference date (whichever is longer)

The accounting reference date is the anniversary of the last day of the month in which the company was incorporated. So, if your company were incorporated on 1 December, your accounting reference date would fall on 31 December.

If it’s not the first time delivering your accounts to Companies House, you must provide them within 9 months from the accounting reference date, which is the anniversary of the day after the previous financial year ended.

What are the penalties for filing accounts late?

It is always best practice to stay on top of your accounts and file them promptly, rather than waiting until the last minute. Strict penalties apply to those who fail to report their accounts on time.

Financial penalties

If you submit your accounts late, you will incur a financial penalty, depending on how long it takes you to file them after the deadline.

If you fail to file your accounts in 2 successive financial years, the penalty you pay will double.

Consequences of failing to file

Failing to file your annual accounts is a criminal offence under the Companies Act 2006. Companies House may pursue enforcement proceedings in serious or repeated cases – including personal fines for LLP designated members or directors.

How to file your annual accounts (step-by-step)

It can be confusing to know what to do when curating your annual accounts, especially if it's your first time doing so as a new business owner or director.

1. Gather your financial records

Start by collecting the key financial records for your accounting period. It can slow down the process if you have to search for and find necessary financial documents as needed.

Here are some examples of financial documents that you may need:

• Income and sales records (invoices, till receipts, interest statements)
• Expense and purchase reports (supplier invoices, expense receipts, utility bills)
• Bank and cash records (business bank account statements, savings or loan account statements, cash book records)
• Payroll and employment records (PAYE records, payroll summaries, payslips)
• VAT records (VAT returns, account summaries, invoices)
• Asset and depreciation records (purchase invoices, asset register, depreciation schedules)
• Loan and finance documents (loan agreements, director loan account records, mortgage statements)
• Share capital and equity records (share certificates, allotment forms, confirmation statement history)
• Stock and inventory records (valuation reports, end-of-year counts, costs of goods sold)
• Previous accounting period records

Once you have all the necessary financial documents gathered, you can proceed with synthesising the information into your profit and loss account and your balance sheet.

2. Prepare the relevant accounts information

Depending on the type of company you operate, you'll need to provide some of the following accounts information.

Profit and loss account

The profit and loss statement includes all the transactions that took place over the accounting period (usually 12 months). It shows whether the company made a profit or loss during that time.

You create a profit and loss account by:

• Adding together all the income
• Deducting allowable business expenses
• Calculating the resulting profit or loss

This is a standard process for accounts, but micro-entities are exempt from publicly filing profit and loss accounts until 1 April 2027.

Balance sheet

A balance sheet provides a snapshot of the company's assets, liabilities, and shareholders’ equity at the end of its financial year. It provides an indication of the business’ financial health as well as its overall value.

The balance sheet should include:

• Assets such as cash, equipment, stock, land, and IT equipment
• Liabilities include what the company owes to suppliers, through loans, and tax liabilities
• Equity, meaning the share capital and retained profits

The balance sheet is approved and signed by a director to confirm the viability of the accounts. The balance sheet is also one of the compulsory elements of preparing your annual accounts.

Accounts notes

Notes to the accounts provide extra detail to help explain figures or calculations made on annual accounts documents. This supplementary information is written to comply with the law, follow accounting principles, help elaborate the company’s financial position, ot support future performance estimates.

They usually include:

• Accounting policies used
• Fixed asset and depreciation details
• Director loan account information
• Commitments, guarantees, or related party transactions

Every limited company must provide notes, though the level of detail varies based on the company’s size.

Director’s report

Some companies may need to prepare a director’s report, which summarises the company's performance during the financial year. Larger companies are responsible for producing these reports, whereas micro-entities and small companies are usually exempt.

A director’s report can include:

• Principal business activities
• A review of the company’s performance
• Details of dividends paid or proposed
• The company’s capacity for expansion and growth

While micro-entities and dormant companies are exempt from preparing a director’s report, they still must include the director’s statement on the balance sheet to confirm their eligibility for exemption.

Audit notes

Your company may be required to have an external audit report conducted by a qualified auditor or chartered accountant. If so, their report should be included in your accounts.

An auditor’s report will include:

• The responsibilities of the auditor and director/s
• Whether the accounting standards have been applied correctly
• Any qualification or concerns identified by the auditor

Small companies and micro-entities can qualify for audit exemption if they meet specific criteria. However, shareholders can request an audit if they own at least 10% of the company’s shares.

3. File your accounts online

Once you have all the necessary information prepared, you are then ready to file your accounts. The easiest method is to use the online portal.

Beforehand, you must make sure that you have your:

• Company director’s approval of accounts
• Companies House password
• Companies House authentication code

Using this portal, you will be able to upload all the information worked out in the previous steps to successfully submit your annual accounts.

You can also use accounting software to upload your annual accounts. Find out which types of accounting software are compatible using HMRC’s tool.

Staying on top of your annual filing duties is an essential part of running a limited company in the UK. While preparing your annual accounts is a separate responsibility, directors must also ensure timely submission of the annual confirmation statement to Companies House to keep company records accurate and up to date. At 1st Formations, our Full Company Secretary Service helps streamline this process by handling confirmation statement filing and maintaining your statutory registers, so your company stays compliant year-round. Learn more by visiting 1st Formations.