What Are Abridged Accounts?
When youre filing small company accounts with Companies House, there are a couple of different options: dormant company accounts, full accounts, micro-entity accounts, and abridged accounts. If youre a small company or start-up with a limited turnover, abridged accounts could be the ideal option. Explore everything you need to know about filing abridged accounts with HMRC with our simple guide. Abridged accounts explained  All businesses in the UK are required by law to prepare statutory accounts at the end of the year. Previously, many small businesses chose to submit abbreviated accounts, rather than full accounts. Abbreviated accounts are much shorter than full accounts and meant that businesses only needed to include a simple balance sheet showing their assets and liabilities. As of 1st January 2016, abbreviated accounts were abolished under UK company law. But that doesnt mean that all businesses are now required to include all their financial information when they file accounts with Companies House. Abridged accounts are essentially a simplified version of your companys annual accounts. They require much less information than full accounts, which means that theyre a great option for businesses that want to limit the amount of financial information thats publicly accessible regarding their company. Because they exclude a breakdown of items on your balance sheet, abridged accounts include less information than full accounts. Most importantly, a simpler balance sheet, as well as any related notes. The balance sheet should include the name and signature of a director. In addition, you may wish to include a simpler profit and loss account, as well as a directors report. Abridged accounts dont need to include a breakdown of your businesss fixed assets, debtors, and creditors. And because theres no breakdown of creditors, you wont need to disclose your corporation tax figure (meaning that its impossible for competitors to estimate your net profit). You may also decide to fillet your abridged accounts. This means that the profit and loss report and the directors report will be removed from the Companies House version of your accounts. There are strict rules regarding which companies can file abridged accounts with Companies House, and which cant. Put simply, your business must meet at least two of the following criteria:  Your turnover does not exceed 10.2 million  Your balance sheet total does not exceed 5.1 million  Your average number of employees does not exceed 50  In addition, youre only allowed to send abridged accounts if all your company members agree. When you file your accounts with Companies House, youll need to include a statement on the balance sheet stating that the members have agreed to abridge the accounts for this accounting period. Beyond abridged accounts, theres also an option for companies with even smaller turnovers, called micro-entity accounts. Essentially, very small companies (micro-entities) may only need to prepare a balance sheet and profit and loss account with even less information than is included in an abridged account. Furthermore, micro-entity accounts dont require you to prepare a directors report. To file micro-entity accounts, your firm will need to meet at least two of the following criteria:  Your turnover does not exceed 632,000  Your balance sheet total does not exceed 316,000  Your average number of employees does not exceed 10  We can help  GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.