HMRC requires most companies to submit Full IXBRL Company Accounts as part of their CT600 annual return filing. The size of your company will dictate which reporting standard you need to use. For Micro sized companies the reporting standard is FRS 105. In this article we guide you through the information you need to include to comply with this FRS 105 to meet HMRC's requirements for Corporation Tax filing.
FRS 105 is a UK accounting standard for micro-entities regime.
A Micro Company is a Company where two of the following apply:
So a company's turnover could be £5 Million, but if its Assets are less than £312,000, and has 10 or less employees it would still be classed as a Micro and would be eligible to report under FRC105 for its Corporation Tax filing.IXBRL stands for Inline eXtensible Business Reporting Language. These are computer readable tags that we add to the information that you input into your Limited Company Accounts template.
If you have not created an account, you can do so for free. If you already have an EasyDigitalFiling account,
logon and create a new IXBRL Accounts Filing template, either
through QuickStart or by creating a new Micro Company filing (Filings Manager -> New Filing Button).
The Micro Company template consists of only 4 pages and the information you need to provide is very limited, so if you have kept on top of your Income and Expenses through the year then you will have most of the information to hand.
Let's start with the easy bit - Company Information
Most of your Company details will have been pre-populated if you selected your Company using the QuickStart, the only fields you may need to complete are either Box 1.4 (Previous Financial year Start date) or Box 1.5 (Previous Financial year End date).
If you have been trading for longer than your current financial year please enter the start and end dates for your previous financial year in Box 1.4.
If you were incorporated during your current financial period or are creating your first financial year accounts please enter your incorporation date in box 1.5.
As mentioned above, your company registered address (Box1.6) and directors (Box 1.7) should have been pre-populated if you used QuickStart, however its worth checking the format of the address (as this is from Companies House Data - which can be patchy), and also remove any directors who were not in office during the accounting period. Nearly there, now just enter the number of employees for this and last year in Box 1.8.
Now we move on to the interesting bit - the income statement.
The income statement, also referred to as the profit and loss statement is a report of all the company's revenue, gains, expenses, losses, net income and other totals for the accounting period. It usually shows the year you are reporting for and the previous year's figures as a comparison.
If this is your first year of trading leave the comparative year's figures blank.
So let's start with income, this is split into 3 parts, income from trade (sales) from the main activity of the Company.
If you have any other income from other activities within the business enter in the next box and similarly if you have any bank interest enter in the last box.
These items will be added up for you and displayed in the green banner. Enter in the information for the Company's previous year if applicable.
The next 5 sections relate to the costs you have incurred during the trading year, these are divided into cost of sales, staff costs, business premises costs,
professional costs and other expenses. These are further sub-divided into more specific areas within these categories.
Just fill any of the boxes where your Company has sustained costs. Some may not be applicable, leave any that aren't blank.
In the meantime you will notice the net profit box at the bottom of the grid, calculates your profit as you go.
Ok, now this is the part that most people find more tricky, let's take it step by step.
The balance sheet show the health of the business. It is divided into 3 sections:
Shareholders' Equity = Assets - Liabilities
The Remaining part of the Balance sheet are the Creditors due in more that a year (long term loan etc),
any provisions (amounts you need to keep for liabilities e.g a known Tax bill), and any accruals
(where the company has received cash, but not yet provided the service). Details below:
Box 3.5 - Creditors - Amount falling due after more than one year. These are any long term liabilities that the Company expects to pay after a year. Examples might be loans or mortgages.
Box 3.6 - Provision for liabilities - This is the amount the business puts aside to cover a probable future debt/liability.
Box 3.7 - Accruals and deferred income - These are the opposite of prepayment and accrued income, so when the Company has received income but not yet provided the goods or service.
Box 3.8 - Net Assets - This is calculated for you. It is: Total assets minus creditors and accrued/deferred income.
Box 3.9 - Capital and Reserves - This is the value of the Company and must equal net assets. This figure is the total of profit or loss for this year, plus any retained earnings from the previous year, paid for share capital minus any dividends taken during the financial period. If you require any further information about accounting for your dividends please see our dividend article.
There are certain statutory statements that must be included in your accounts.
These are the statements on the Company's exemption from audit, the directors' acknowledging their responsibility under the Companies Act and the account
To help you along we have included the standard wording for these in Boxes 4.3, 4.4 and 4.5. If for any reason you need to change them, you can edit these boxes.
The only other box you must complete is Box 4.2 - the principal activity of the company, a few words describing what the company does will be sufficient.
To finish we will just look at the other notes that can be added.
Box 4.0 - Directors advances, credits and guarantees. If the company has made any loans to any of the directors during the financial period make a note of it here.
Box 4.1 - Outstanding obligations - If you have any outstanding loans, you need to make a note of the nature of them in this box.
Finally, the only thing left to do is enter the date the accounts were approved by the board and enter the name of the director who signed the accounts on behalf of the board.
If you have any errors or warnings at the bottom of the template, please click on them and they will take you to the relevant section.
RED warnings will prevent you from filing with HMRC and must be addressed before you complete your filing.
AMBER warnings are there to help you with your filings. If they do not apply just accept the warnings when you are ready to file.