Posted by Joy & Co Chartered Certified Accountants on 28th May 2020
Clients have sometimes rung me in a panic asking for help because their annual accounts are due in a matter of days. When they produce the letter from Companies House it turns out that it’s actually the confirmation statement that’s due and not the accounts. It’s important therefore to realise the difference between the confirmation statement and the annual accounts.
The confirmation statement is basically a quick snapshot describing the state of the company and its directors at the end of a year. It asks for general information on the directors, i.e. their names and addresses, and where there’s a company secretary it asks for similar information.
Other requested information includes the registered office address, details about the shareholders and the company’s share capital.
If nothing has changed since it was last filed it’s often just a case of checking that the details that Companies House hold are up to date and then clicking on "confirm". There is no technical knowledge required to complete it, it’s more a case of being thorough and logical.
The annual accounts are what most clients are more familiar with. Typically, the accounts of a micro-company will comprise a profit and loss account, balance sheet signed by a director and notes to the accounts.
The profit and loss account describes what the company did during the year. How much money it pulled in, how much it spent, what did it spend it on, did it come out ahead, i.e. make a profit or come out behind and make a loss.
The balance sheet gives a static picture of the position of the company at the year end date. What are its assets, its liabilities, how much is the company owed, how much does the company owe. How large are its reserves and so forth. Think of it as a snapshot of the company as at a particular date.
This is typically where the directors will hire an accountant as there are specific rules on the valuation of assets and liabilities and on the reporting of income and expenditure.
So there you have it. The next time you get a demand from Companies House for your confirmation statement there’s no need to panic, just confirm that the information held is up to date and update it if not.
Of course if you really can’t be doing with it all just give Joy & Co a call and we’ll happily take it off your hands.
