New fil­ing re­quire­ments have come into force for small com­pa­nies here

Belfast Telegraph - Business Telegraph - - Analysis & Company Report - By Claire Thom­son, Man­ager, Risk, Com­pli­ance and Pro­fes­sional Stan­dards @Grant­thorn­tonni For fur­ther in­for­ma­tion, Claire Thom­son can be con­tacted at claire. thom­son@ie.gt.com or visit http:// www.grant­thorn­tonni.com/ Grant Thorn­ton (NI) LLP spe­cialises in

Ac­cess to in­for­ma­tion held about any of the 3.6 mil­lion com­pa­nies at Com­pa­nies House has be­come ef­fort­less over re­cent years, and gen­er­ally can be ac­cessed free of charge within a few min­utes on any smart de­vice.

Fol­low­ing the in­tro­duc­tion of the Com­pa­nies, Part­ner­ships and Groups (Ac­counts and Re­ports) Reg­u­la­tions 2015, the fi­nan­cial in­for­ma­tion that will be avail­able at Com­pa­nies House is chang­ing.

Un­der the new reg­u­la­tions how­ever, small com­pa­nies (ex­clud­ing mi­cro en­ti­ties) reg­is­tered in the UK no longer have the op­tion of fil­ing ab­bre­vi­ated ac­counts at Com­pa­nies House. For those en­ti­ties, ab­bre­vi­ated ac­counts have been abol­ished.

The reg­u­la­tions will be manda­tory for ac­count­ing pe­ri­ods be­gin­ning on, or af­ter, Jan­uary 1, 2016, although early adop­tion is per­mit­ted, and some lo­cal com­pa­nies are al­ready tak­ing ad­van­tage of the new regime.

The new reg­u­la­tions in­tro­duce the prin­ci­ple of ‘file what you pre­pare’, so, from the above date, a small com­pany may pre­pare and file full ac­counts; or, 2) pre­pare and file ‘abridged’ ac­counts, or, 3) pre­pare and file ‘fil­leted’ ac­counts.

Small com­pa­nies have al­ways had the op­tion to file full statu­tory ac­counts, in­stead of avail­ing of any rel­e­vant ex­emp­tions avail­able. It is un­likely that this will be the pre­ferred op­tion for many busi­nesses, as it may in­volve lengthy dis­clo­sures and more de­tailed fi­nan­cial state­ments.

Abridged ac­counts are a new con­cept in­tro­duced by the new reg­u­la­tions. In this con­text, abridged ac­counts per­mit the profit and loss ac­count to start at the gross profit/loss line, and also re­duces the analysis re­quired on the face of the bal­ance sheet. All mem­bers must ap­prove the abridge­ment and this fact must be stated on the bal­ance sheet. The di­rec­tors will need to ob­tain this con­sent ev­ery year. This op­tion is not avail­able to char­i­ta­ble com­pa­nies.

Fil­leted ac­counts are likely to be the most pop­u­lar op­tion for small com­pa­nies go­ing for­ward, due to the sim­i­lar­ity to the for­mer ab­bre­vi­ated ac­counts. Fil­leted ac­counts use an ex­emp­tion con­tained within sec­tion 444(1) of the Com­pa­nies Act 2006, and per­mit the ex­clu­sion of the di­rec­tors’ re­port and the profit and loss ac­count from the ac­counts filed. The bal­ance sheet must state that this ex­emp­tion is be­ing utilised.

There is also a pro­vi­sion within sec­tion 444 of the Act that per­mits the ex­clu­sion of the au­dit re­port for those small com­pa­nies who are au­dited, pro­vided that cer­tain dis­clo­sures are made else­where in the fi­nan­cial state­ments.

Of per­haps greater sig­nif­i­cance is the fact that the new reg­u­la­tions have in­creased the small com­pany thresholds, mean­ing more com­pa­nies will be able to avail of the above.

A com­pany will qual­ify as small if it meets two of the three fol­low­ing thresholds: 1. turnover of £10.2m; 2. to­tal as­sets of £5.1m; 3. em­ployee num­bers, 50.

The govern­ment an­nounced in 2016 that the au­dit thresh­old will also in­crease, to re­tain the align­ment with the small com­pany def­i­ni­tion.

The in­creased au­dit thresh­old is not avail­able for early adop­tion, but will come into ef­fect for pe­ri­ods be­gin­ning on or af­ter Jan­uary 1, 2016.

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