Many more companies will qualify as small as a result of the substantially increased company size limits. The new size criteria below is mandatory for periods commencing on or after 1 January 2016, although earlier adoption is permitted for financial years beginning on or after 1 January 2015 (the audit exemption cannot be early adopted):
|Old Limits||New Limits|
The size limits to qualify as a micro-entity are set out below:
A company needs to meet two out of three of the above criteria for two consecutive years to qualify as a small or micro company, unless it is the first year of the company’s existence, in which case only that year has to be considered. The turnover limit is adjusted if the financial year is longer or shorter than twelve months.
Micro-entities are very small companies. Your company will be a micro-entity if it has any 2 of the following:
- a turnover of £632,000 or less
- £316,000 or less on its balance sheet
- 10 employees or less
If your company is a micro-entity, you can:
- prepare simpler accounts that meet statutory minimum requirements
- send only your balance sheet with less information to Companies House
- benefit from the same exemptions available to small companies
You must still send statutory accounts to your members and to HMRCas part of your Company Tax Return if you’re a small company or micro-entity.
Fair value accounting and alternative accounting rules cannot be applied in micro-entity accounts, meaning no revaluations or measurement at fair value is permitted.
Along with a full set of accounts, HMRC will require a CT 600 to be completed. This is not a straightforward form, so unless you have the necessary experience, it’s best left to an accountant!
Regardless of how much they earn, each company director may have to complete a self-assessment showing all of their income, not just that received from the company.
Any business that employs staff has a number of reporting requirements. Under PAYE (RTI), almost all employers are required to report their payroll information to HMRC online on or before each payday. Payroll information is reported to HMRC each time you submit your payroll information.
KG Accountants based in south London are small business accountants who provide Small business accounting services and Taxation services including completing and filing your tax returns, Limited Company Accounts, payroll, bookkeeping and VAT at a reasonable price.
If you need to speak to a Pro active Accountant about your new venture, please contact us on 0208 679 4690 please Visit our website.