UK Company Accounts Thresholds and Benefits

Navigating the world of company accounts can be complex, but understanding the thresholds and benefits of filing micro-entity, small, medium, and large company accounts can make a significant difference for your business.

Getting the correct treatment in your accounts can make a big difference

At JSC Accounting, we deal with micro-entity and small company accounts as our specialty. We find that client's that don't have these types of accounts correctly done, or stick to the thresholds below, end up over disclosing information such as bank balances, overdraft balances and trade balances, which can be valuable information to their competitors.

Micro-Entities (FRS 105)

Thresholds:

• Turnover: Up to £632,000

• Balance Sheet Total: Up to £316,000

• Employees: Up to 10

Benefits:

• Simplified Reporting: Micro-entity accounts require fewer details, making the process less time-consuming and reducing the administrative burden.

• Cost Savings: With less documentation needed, businesses can save on accounting fees.

• Privacy Protection: Filing abridged accounts means less information is publicly available, helping to keep sensitive data private.

• Reduced Error: Simpler processes mean fewer chances for mistakes.

Small Companies (FRS 102 Section 1A)

Thresholds:

• Turnover: Up to £10.2 million

• Balance Sheet Total: Up to £5.1 million

• Employees: Up to 50

Benefits:

• Audit Exemption: Small companies can choose not to have their accounts audited.

• Flexibility: You can decide whether to send a copy of the director’s report and profit and loss account to Companies House.

• Abridged Accounts: If all company members agree, you can send simpler balance sheets and notes.

Medium-Sized Companies (FRS 102)

Thresholds:

• Turnover: Up to £36 million

• Balance Sheet Total: Up to £18 million

• Employees: Up to 250

Benefits:

• Audit Exemption: Medium-sized companies can also choose not to have their accounts audited.

• Strategic Report: Required to include a strategic report, providing insight into the company’s business model, strategy, and risks.

• Directors’ Report: More detailed disclosures compared to small companies.

Large Companies (IFRS)

Thresholds:

• Turnover: Over £36 million

• Balance Sheet Total: Over £18 million

• Employees: Over 250

Benefits:

• Comprehensive Reporting: Large companies are required to follow International Financial Reporting Standards (IFRS), providing a comprehensive view of the company’s financial health.

• Transparency: Enhanced transparency and accountability due to more detailed reporting requirements.

Difference in Disclosures

Micro-Entity Accounts (FRS 105):

• Balance Sheet: A simplified version with fewer details.

• No Profit and Loss Account: Not required to submit this.

• No Director’s Report: Exempt from submitting this.

Small Company Accounts (FRS 102 Section 1A):

• Balance Sheet: Can be simplified but may include more details than micro-entity accounts.

• Profit and Loss Account: Optional to submit.

• Director’s Report: Optional to submit.

Medium-Sized Company Accounts (FRS 102):

• Balance Sheet: More detailed than small company accounts.

• Profit and Loss Account: Required.

• Director’s Report: Required, including strategic report.

Large Company Accounts (IFRS):

• Balance Sheet: Comprehensive details.

• Profit and Loss Account: Required.

• Director’s Report: Required, including strategic report and additional disclosures.

By understanding these thresholds and benefits, businesses can make informed decisions on how to manage their accounts efficiently and effectively. Whether you’re a micro-entity, small company, medium-sized company, or large company, there are options available to simplify the process and reduce the workload.

If you think we can help your business, get in touch or call us at 0115 646 2003