Accounting

Accounting services

Annual accounts, management accounts and corporation tax sit at the centre of the financial year for UK limited companies, LLPs and groups. Annual accounts are filed at Companies House under the Companies Act 2006; the corporation tax return is filed with HMRC under corporation tax self-assessment; management accounts inform decision-making between year-ends. Vision Consulting works with companies from owner-managed businesses through to mid-sized groups, preparing annual accounts under UK GAAP, management accounts on a monthly or quarterly cadence, and the corporation tax return alongside. We are chartered accountants regulated by the ICAEW and a registered auditor with three offices in London.

What are annual accounts?

Annual accounts (also referred to as statutory accounts or year-end accounts) are the financial statements every UK limited company and LLP is required to prepare at the end of its financial year. They are filed at Companies House, where they sit on the public register, and they form the basis of the company's corporation tax calculation submitted to HMRC.

A full set of annual accounts ordinarily comprises:

- A balance sheet showing the company's assets, liabilities and shareholders' equity at the year-end date
- A profit and loss account covering the financial year
- Notes to the accounts explaining the figures and accounting policies
- A directors' report (not required for micro-entities)
- A strategic report for medium-sized and large companies
- An auditor's report where the company is subject to a statutory audit

The level of detail required, and which of the above must be filed at Companies House, depends on the size of the company. Small companies and micro-entities may file reduced or filleted accounts; medium and large companies file a full set.

Company size and reporting requirements

UK companies fall into one of four size categories under the Companies Act 2006: micro-entity, small, medium-sized, and large. A company qualifies for a category by meeting two of three tests (turnover, balance sheet total, and average number of employees) in two consecutive years. Any company exceeding two of the three medium thresholds is classified as large.

The thresholds rose on 6 April 2025, increased by approximately 50% to reflect inflation since they were previously set. For financial years beginning on or after that date:

- Micro-entity: turnover up to £1 million, balance sheet total up to £500,000, up to 10 employees
- Small: turnover up to £15 million, balance sheet total up to £7.5 million, up to 50 employees
- Medium-sized: turnover up to £54 million, balance sheet total up to £27 million, up to 250 employees
- Large: any company that exceeds two of the three medium-sized thresholds

Following the increase, an estimated 113,000 companies and LLPs are expected to move from the small to the micro-entity bracket, and around 14,000 from medium-sized to small, with corresponding reductions in reporting and disclosure obligations. The audit exemption threshold tracks the small company threshold, subject to the ineligibility criteria set out in the Companies Act.

Filing deadlines and penalties

A private limited company must file its annual accounts at Companies House within nine months of its accounting reference date. A newly incorporated company has 21 months from the date of incorporation for its first set, or three months from the accounting reference date, whichever is longer. Public limited companies have a six-month deadline.

The corporation tax return (CT600) is filed with HMRC within twelve months of the end of the accounting period. Any tax due is payable nine months and one day after the period end for companies that are not classified as large or very large; large and very large companies pay corporation tax in quarterly instalments.

Companies House late filing penalties for private companies and LLPs apply automatically and increase with the length of the delay:

- Not more than 1 month late: £150
- More than 1 month but not more than 3 months late: £375
- More than 3 months but not more than 6 months late: £750
- More than 6 months late: £1,500

These figures double where accounts are filed late in two consecutive financial years (for accounting periods beginning on or after 6 April 2008). HMRC penalties for late corporation tax returns and late payment of corporation tax apply separately under their own regime.

Management accounts

Where annual accounts look backwards at a completed financial year, management accounts give directors and shareholders an in-year view of how the business is performing. They typically include a profit and loss account, balance sheet position, cash flow summary, and commentary against budget or prior period.

We prepare management accounts on a monthly or quarterly basis depending on what the business requires. They serve as the basis for board reporting, lender covenant testing, and routine management decision-making, and give visibility on debtor positions, accruals, and margin movements during the year rather than at the year-end.

Corporation tax

The corporation tax return is prepared from the same underlying figures as the annual accounts and filed with HMRC alongside them. For the financial year beginning 1 April 2025, the main rate of corporation tax is 25% on profits over £250,000, the small profits rate is 19% on profits up to £50,000, and marginal relief applies to profits between the two thresholds.

Where standard reliefs and elections are relevant (research and development relief, capital allowances including the annual investment allowance and full expensing, group relief, loss carry-back) they are considered as part of preparing the return. For more involved corporation tax planning that goes beyond the year-end review, see our tax planning service.

Making Tax Digital does not apply to corporation tax. HMRC confirmed in its July 2025 Transformation Roadmap that it will not introduce MTD for Corporation Tax, and CT600 returns continue to be filed under existing rules.

Changes to UK GAAP from 1 January 2026

The Financial Reporting Council issued amendments to FRS 102 in March 2024 under its Periodic Review 2024, with most of the changes taking effect for accounting periods beginning on or after 1 January 2026. Two changes are material for most companies.

Section 23 (Revenue from Contracts with Customers) introduces a five-step revenue recognition model, broadly aligned with IFRS 15. The new model affects the timing and pattern of revenue recognition, particularly for contracts involving bundled goods or services, variable consideration, warranties, or significant financing components.

Section 20 (Leases) removes the distinction between operating leases and finance leases for lessees. Most leases will be recognised on the balance sheet as a right-of-use asset with a corresponding lease liability. Companies with material operating leases (offices, vehicles, equipment) will see changes to balance sheet totals, reported EBITDA, and any covenants that reference them.

Transitional provisions apply. On first application, the lease amendments are required to be implemented using a modified retrospective approach; for the revenue amendments, entities may choose between a modified retrospective approach and a full retrospective approach.

About Vision Consulting

Vision Consulting was founded in 2002 and is a firm of chartered accountants regulated by the Institute of Chartered Accountants in England and Wales. We are a registered auditor, an ICAEW Authorised Training Employer, and hold the ICAEW probate licence.

Accounts engagements are run by experienced senior staff under chartered oversight, with each client retaining the same point of contact from one year to the next. Whether a company is below the audit threshold or above it, the underlying accounts work is prepared to the standard a chartered firm with a registered auditor practice applies across all engagements.

Frequently asked questions

Can you take over from my current accountant part way through the year?

Yes, and you do not need to wait for your year end. We write to your current accountant for professional clearance and the handover records, which is a routine courtesy between firms rather than a request for permission. You do not have to have that conversation yourself. In practice the change is usually complete within a few weeks, and we will tell you before you commit if there is anything about the timing, such as an imminent filing deadline, that makes a later date more sensible.

Do I still need an accountant if I use Xero or QuickBooks?

Bookkeeping software records transactions well. It does not decide how a transaction should be treated, whether an expense is allowable, how to present the accounts under the applicable reporting framework, or what the figures mean for your corporation tax and your own position as a director. Good software makes the accounts cheaper to prepare and reduces errors, which is why we encourage it. It does not remove the judgement, the filing responsibility, or the tax planning.

When are my company's first accounts due?

A private company's first accounts are due at Companies House 21 months after the date of incorporation. After that, accounts are due 9 months after the end of each financial year. Corporation tax runs on a different clock: the payment is due 9 months and 1 day after the end of the accounting period, and the return itself 12 months after. The first year catches people out most often, because the accounting reference date is set automatically to the end of the month of incorporation.

My company is dormant. Do I still have to file anything?

Yes. A dormant company still files dormant accounts at Companies House and a confirmation statement each year, and late filing penalties apply in the same way. Whether the company is dormant for Companies House purposes and dormant for corporation tax purposes are two separate tests, and a company can be one without being the other. Even a small amount of activity, such as bank interest or a single payment, can end dormancy, so it is worth confirming the position rather than assuming it.

Does Making Tax Digital apply to my limited company?

Not for corporation tax. Making Tax Digital for Income Tax applies to sole traders and landlords, phased by income from self employment and property: from 6 April 2026 for those above £50,000, from 6 April 2027 above £30,000, and from 6 April 2028 above £20,000. It applies to the individual, not the company, so a director who also has rental income in their own name can be caught by it while the company is not. Making Tax Digital for VAT already applies to VAT registered businesses.

What will it cost to have my accounts prepared?

The fee depends on the size of the company, the state of the bookkeeping, and what else is in the engagement, such as payroll, VAT, the corporation tax return and the directors' personal tax returns. We quote a fixed annual fee in writing after looking at your last set of accounts and your current records, so you are not agreeing to an open-ended hourly arrangement. If the records need work before the accounts can be prepared, we will say so at that point rather than at the end.