On 2 September, 2019, the Office of the Regulator of Community Interest Companies announced that most of the 17,000 CICs in the UK will be able to file their accounts online.
“This on-line filing service can be used by small companies which choose to file “full” accounts under s444 of the Companies Act 2006 (also known as small-“full” accounts),” the press release posted on the Office’s website states.
This change will reduce the time and effort it takes to file annual accounts with the government.
There are some specific criteria that a CIC must meet in order to be allowed to use the online filing system.
- Total turnover cannot exceed ￡10.2 million.
- The balance sheet cannot exceed ￡5.1 million.
- The average number of employees must be less than 50.
The announcement makes it clear that the use of the online system is completely optional for CICs that meet the above criteria.
Since the majority of CICs meet these criteria, it’s expected that this change will save a great deal of time and money, both for the CICs and for the Office charged with monitoring CIC activity.
CICs also have a choice as to what type of account that choose to file, but they are required to file a copy of those accounts with the Registrar of Companies. It’s important that the accounts prepared by identical to the ones that are filed with the government.
Companies must file a balance sheet and notes. They can prepare ‘small’ full, ‘abridged’, or ‘micro-entity’ accounts. The differences are not significant and there’s not necessarily more information than any other format.
Why allow online filing of CIC accounts?
Cost is the short answer. Both the companies and the government will be saved a great deal of money by allowing everything to be digitized.
Filing times will be reduced significantly as there will be no need to post the accounts. This will also help avoid late filing penalties.
Being online allows for submission of documents 24 hours a day. There’s no need to wait for the postal service to be open.
More than simply being a way to do a filing, CICs can also submit their annual reports, and even their payment. Everything can happen online.
What can’t be included in the online submission?
The system doesn’t accept several documents. The director’s report or P&L reports are not accepted. It’s not possible to change the dates that accounts are made up to.
Balance sheets that include items like a revaluation reserve or intangible assets.
The easiest way to make sure that your documents and your CIC can be accepted electronically, enlisting the help of a professional accountant to help you sort out what you can do and to prepare your documents for transmission.
The system also confirms each step of the way. You will receive confirmation of receipt of documents. Documents will be put into the public register much faster. You’ll also get instant notification that your accounts are received.
This will make the process of submitting documents as easy as ordering something on Amazon or submitting a school paper online.
Some CICs don’t qualify
Large and medium-sized CICs won’t qualify for online submission of accounts. They exceed the criteria, either turnover, balance sheet total, or number of employees.
The companies will need to continue submitting their documents as they have been.
Should you file your own accounts?
Many CICs, especially in the early years, will try to file their own accounts. This might seem like a cost-saving measure, but it’s a bit like not having insurance – if something goes wrong, it’s going to cost a whole lot more.
At KG Accountants, we have been doing CIC accounts, taxes, and more since the structure was begun in 2005. We’ve been watching the evolution of this form of business since then.
Every year, the laws that govern CICs change. While it’s a fairly relaxed form of government oversight, there is still, nonetheless, oversight. If you file late or if major pieces of your accounts are missing or wrong, there can be significant penalties.
It might seem a bit self-promoting, but recommend that you get a professional accounting firm like ours to help you file your CIC’s accounts.
In fact, it can be helpful to start with a group like ours that can take you through the entire lifecycle of a CIC.
Formation – Your governing documents will be referred back to at every step of the CICI’s growth. Every time that you file accounts, you’ll need to show that you’re meeting the community interest obligations that you set forth. Things like knowing what asset locked body you can should nominate to receive the CIC’s assets is vital to the smooth operation of your organisation.
Taxes and accounts – Every year, you need to fill the right documents, on time. These are fairly complex forms. With the advent of online filing, some parts are easier to file, but the system doesn’t accept some documents. Those documents need to be posted to the Regulator’s offices. Making sure that you get all of the documents filed will save you a lot of stress.
Dissolution – If the CIC disbands for any reason, the coverage of debts and transfer of residual assets needs to be handled in accordance with the law. There are specific guidelines that should be followed to ensure that you avoid undue scrutiny later.
The Office of the Regulator of Community Interest Companies is an advocate for CICs and works hard to make it as easy as possible. Nonetheless, these are complex, ever-changing laws. It’s wisest to enlist help from KG Accountants or other CIC professionals.
At KG Accountants , we provide a cost-effective, high value solution to meet all of your CIC needs. if you need to register a new CIC then look no further!
All our CIC fees are fixed.
By giving you a fixed and competitive price, we can take the worry away when it comes to running your CIC; allowing you to concentrate on running your organisation.
Call us on: 0207 953 8913