Filing an annual report means facing a dedicated deadline that many struggle to plan for. Between wrestling with the details of what needs to be filed when the filing needs to be complete, and how much time the report compilation will take, information gets lost.
This is especially frustrating in regards Community Interest Companies (CIC) accounts which must file both an annual account filing and a report on the year’s activities. These accounts need to be compiled and also sent to various micro entities to keep in compliance with internal guidelines and external registries.
Those who fail to file everything on time face additional scrutiny to their respective organisations. This leads to delays in being able to act and costs the community interest company valuable opportunities.
Keep your CIC ready for filing by staying up to date on the information required and using the cic accounts checklist.
Community Interest Company accounts
Going into the filing process for a CIC company, it’s important to be aware of the whole process and all of its elements. The filing needs to include all of the business for a financial year, which means having that information to complete the statutory account.
Estimates and projections will not do, and though the filing deadline gives time between the end of the fiscal year, many filers still forget that they won’t have total access to the data instantly. One of the larger problems with getting CIC accounts filed is the unexpected delay created by some filing requirements.
The purpose of the filing keeps the CIC transparent financially and also acts as an advert to attract investors. The information is public so it also provides insight into other organisations to learn from or cooperate with.
How to Prepare CIC Company Accounts
Preparing for a filing requires knowing multiple pieces of information and gathering data associated with each.
First, the size of the CIC is needed. This sets criteria for what needs to be filed and how that filing can occur.
Ideally, a small CIC of less than £10.2m in turnover and £5.1m on the balance sheets are eligible to file online. However, currently, the online filing requires information that comes by post. There is a 15 fee to file and a CIC needs their authentication code before they can interact with the Companies House online.
Small CICs also have access to an expanded full accounts service online that helps with notes, balance sheets, and different account formats. These are meant to help smaller limited companies respond quickly and file without running into penalties.
For CICs beyond the ‘small’ cut-off, post-filing is still required.
What Reports to Include
The Reports for the filing maintain a similar structure across all CIC sizes but it’s important to confirm the level of detail necessary at each level by checking the Companies House requirements.
The statutory accounts need to duplicated and shared with shareholders, HMRC, and the Companies House.
Standard Reports for the statutory report include:
- Directors report – This isn’t needed for companies below ‘small’ with £632,000 or less in total turnover.
- Profit and loss – Including running costs, profits and loses, and company sales for the duration fo the financial year.
- Notes concerning and detailing accounts
- Balance Sheet – the most important component, this lists the assets of the company, outstanding invoices, and what it owes for the financial year.
Remember that this documentation is used to complete tax documents, a CIC is liable for Corporation tax as it is still a company with income and gains.
Additionally, an annual activities report, the CIC34, is filed.
This report includes:
- Asset locks and transfer of assets to other asset-locked entities
- Notes on consultation to shareholders by the CIC
- Declared and proposed dividends and interest paid related to performance
- Detailed information on all that the CIC has done to benefit the company as a whole for the year
Given the subjective nature of this report, many companies use it as a way to show off their value. As it can be publicly accessed, it makes for a good foot-in-the-door for courting investors and further business opportunities.
How to Submit
Create a checklist of the reports needed and then expand that with additional items. If working with more than one person in the CIC establish who is responsible for what and confirm that documents are complete.
Complete and send all documents at once. Anything missing requires a complete resubmission. This not only causes delays but leads to confusion and fines.
Using cloud-based documents is an excellent way to keep everything together and chart progress.
Except in the case of ‘small’ and under CICs, everything is submitted by post along with a £15 cheque for the Companies House.
Late documents face fine up to £1500. Delays in filing also reflect poorly in the transparency and undermine any bravado included in the activities report.
Deadlines and Dates
A CIC begins its financial year the day it is incorporated. This is not when the documents are submitted but when the Companies House officially recognizes the incorporation.
The end of the month that this occurs on a year later is the end of the financial year. This is known as the company’s accounting reference date.
This delay for the date keeps filings consistent on all sides. After that, the accounting reference date will fall on the same date each year as long as no legal structures change.
The deadline for filing the statutory accounts is set nine months after this date. This gives ample time to confirm the business of the financial year and prepare the report. Still, many CICs struggle to make their filing each year.
Though detail-oriented, filing CIC accounts mostly comes down to vigilance in what changes inside an organisation so that reports can be completed quickly.
Tracking assets is vital to keep the CIC in line with regulations and to give it the flexibility necessary to dissolve, change structure and meet its commitment to the public good.
Don’t fall behind in filing. Reach out for help by contacting KG Accountants for advice and guidance.
How we can help
If you would like more information or would like to ask us a question then call us on 0207 953 8913 To ask us a question online click here.