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Chartered Accountants | Business Development Specialists | Registered Auditors.
Abbey House, 342 Regents Park Road, Finchley, Barnet, London, N3 2LJ
(Also offices in Milton Keynes, Buckinghamshire)
Growing your business is our business
The ongoing implementation of the Companies Act 2006 (the Act) continues and one of the key implementation dates, 6 April 2008, has now passed. This important date saw the sections of the new Act that relate to accounts and reports and audit come into force and some of the practical changes are highlighted below.
The financial limits that determine whether a company or group qualifies as small or medium-sized have been increased for accounting periods beginning on or after 6 April 2008.
| Individual company limits | Small company limits | Medium-sized company limits | |
|---|---|---|---|
| Turnover not more than | £6.5m (£5.6m) | £25.9m (£22.8m) | |
| Balance sheet total not more than | £3.26m (£2.8m) | £12.9m (£11.4m) | |
| Number of employees not more than | 50 (50) | 250 (250) | |
The limits are important as they determine whether a company can benefit from the preparation of simpler accounts, file abbreviated accounts on the public record at Companies House and qualify for audit exemption.
The new Act removes the exemption from the preparation of medium-sized group accounts, so the new higher limits shown below are particularly important for those affected.
| Group limits | Small company limits | Medium-sized company limits | |
|---|---|---|---|
| Net turnover not more than | £6.5m (£5.6m) | £25.9m (£22.8m) | |
| Gross turnover not more than | £7.8m (£6.72m) | £31.1m (£27.36m) | |
| Net balance sheet total not more than | £3.26m (£2.8m) | £12.9m (£11.4m) | |
| Gross balance sheet total not more than | £3.9m (£3.36m) | £15.5m (£13.68m) | |
| Number of employees not more than | 50 (50) | 250 (250) | |
Please contact us at an early stage if you think that these new limits will affect your company.
The new Act also shortens the filing deadline to nine months from the year end for private companies (previously ten months) and to six months for public companies (previously seven months). These changes are effective for accounting periods beginning on or after 6 April 2008. That will be April 2009 year ends and onwards for most.
Proposals to increase the penalties associated with late filing of accounts at Companies House have also been finalised.
| Length of delay, measured from the date the accounts are due: | Private company | Public company | |||
|---|---|---|---|---|---|
| Current | New | Current | New | ||
| Up to 1 month | £100 | £150 | £500 | £750 | |
| 1 to 3 months | £100 | £375 | £500 | £1500 | |
| 3 to 6 months | £250 | £750 | £1000 | £3000 | |
| 6 to 12 months | £500 | £1500 | £2000 | £7500 | |
| More than 12 months | £1000 | £1500 | £5000 | £7500 | |
The increases will be introduced from 1 February 2009. Where accounts are filed under the new Act, the penalties will be doubled for late filing in two successive years.
From 6 April 2008 private companies are no longer required to have a company secretary, although they may continue to have one if they wish. There are a number of practical considerations associated with this decision, as many of the tasks that the company secretary traditionally performed remain.
You should review your company's Articles of Association to establish whether the wording requires you to have a company secretary. If you do decide to remove your company secretary, you may need to make changes to the Articles and form 288b will need to be filed at Companies House.
If you would like to discuss how any of these changes might affect your company in more detail please contact us.
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