Annual accounts vs Confirmation Statement:
A beginners guide
Annual return and annual accounts were the cause of confusion among business owners, as both contained the word “annual”. Annual return was later renamed as Confirmation Statement with additions of Person of Significant Control (PSC) details. So the only difference between Annual return and Confirmation Statement is PSC reporting only.
Here, we will provide you with an essential guide that will help you to understand the difference between annual accounts and confirmation statement, what are the contents of both and filing requirements.
What are the Annual accounts?
Annual Accounts, also known as statutory accounts, are prepared from company’s financial records and must include:
An auditor’s report is required depending upon the size of the company. Bigger businesses include annual accounts as part of their annual report, which also includes CEO/Chairperson’s review, business activity details, insights to the plans, cash flow statements and other information of interest to the user of financial statements.
Under International Financial Reporting Standards (IFRS), the term used for annual accounts is financial statements.
A company is required to send copies of annual accounts to all shareholders, people who can go to the company’s annual general meeting, Companies House and HM Revenue and Customs (HMRC).
Now let’s talk in details about each component of annual accounts:
You will automatically receive a penalty notice if your company accounts are filed after the deadline. Amount of penalties ranges from £150 to £1,500 depending upon how late you are. Your company can be struck off the register.
What are the contents of a confirmation statement?
Here is an essential list of all the information required while filing the confirmation statement of your company:
So, let us understand who exactly a PSC or Person of Significant Control in the company is:
How to file your confirmation statement:
You can file your confirmation statement online on the Companies House website. File your confirmation statement online. You will need your password and authentication code. If you do not have these, you’ll need to register for online filing.
Filing deadlines and review period:
At least one confirmation statement is required to be filed every 12 months. Your 12-month review period starts on either the date your company was incorporated or the date you filed your last confirmation statement.
You must submit your statement within 14 days of the end of your review period.
Example: Your new company is incorporated on 01 Jan 2020. Your review period will start on 1 Jan 2020 and will end on 31 Dec 2020. Confirmation statement filing deadline is 14 Jan 2021.
What if I file a confirmation statement earlier?
So in the above example, if you filed a Confirmation Statement on 30 June 2020, then your next review period will be from 01 July 2020 to 30 June 2021. Confirmation statement filing deadline will be 14 July 2021.
What if nothing has changed?
A no change confirmation must be filed if nothing has changed during the review period. As the name suggests, confirmation statements confirm that your records are up to date and the information is correct.
Companies House filing fee for the confirmation statement is:
What happens if I don’t file a Confirmation Statement?
Your company is at risk of being struck off the register, and its officers are at risk of being prosecuted if you do not file a Confirmation statement on time.
In summary, a Confirmation Statement aims that information about the company and its owners is up to date on the Companies House. On the other hand, Annual accounts are detailed information about the company’s financial affairs. Both sets of information are in the public domain and available on the Companies House website.
About The Author:
Aarif Habeeb is a Digital marker and Content manager at 123Financials – An Accounting Firm in London. He is a passionate blogger and love to share his knowledge on various subject. Content created by 123 Financials are loved, shared & can be found all over the internet on high authority platforms.