That it is difficult to file relevant paperwork on time is part of the point of the relevant paperwork. For a company with a community interest, reporting statutory accounts each year can feel tedious.
The information in CIC Accounts covers the financial health of the organisation, the projections of revenue, payments to staff, and more. while manageable, CIC accounts are some of the more detailed and labour-intensive of reporting documents.
CIC Accounts Filing
First, it’s important to not view the accounts filing as a chore. Though it is mandatory, it presents an opportunity over a burden. An account filing illustrates the health of the company, their commitment to the community, and attracts investors looking to get involved in good ideas and good work.
That’s why it’s important for CICs to put their best foot forward in ensuring their filing is thorough, accurate, and complete.
Submitting accounts is only one step in the annual business of a CIC. They also need to submit their annual report, fortunately, the two deadlines are not identical.
Community Interest Companies have a lot of mobility and leeway due to their unique legal structure. The additional reporting pressures help CICs stay aware of their financial health and impact.
One thing that makes account filing difficult is the inability to spot issues early on. While there are systems that provide confirmation upon receipt of documents, that doesn’t ensure that documents were correct or complete.
To combat this, it is up to the CIC board and bookkeepers to confirm all contents before they submit. This is one reason that all filings are reviewed by every member of the board.
Knowing the forms and filling them out thoroughly also helps. The most common form is form CIC34. This includes an internal checklist and an online version.
The online form CIC34 makes an excellent record-keeping device as a digital backup, even if a CIC decides to submit offline.
There are many addendums to the form based on specific information and structures within the CIC, so it pays to read the form fully before starting the process.
Information to Cover
A CIC needs to file multiple documents with multiple entities. The obvious ones include the Companies House and HMRC. Shareholders and general meeting attendees also need statutory accounts.
The leadership and board of a CIC need to sign off on each of the documents before they including them as part of the accounts. As mentioned, this helps ensure accuracy and fullness in the documents. It’s also a formality that ensures members of the CIC with financial control know what’s going on.
- Director’s report – providing insight and a summary of the company’s goals and progress over the year
- Notes explaining the accounts – this makes the information accessible to the general public of non-accountants and finance-minded folk
- Balance sheet – a complete showing of all the assets of the company
- Profit/loss – a record of the running costs, profits, and losses for the year
All CICs face the same requirements. However, the level of granular detail varies by the size of a company.
A company files every year, even for a dormant CIC. To stop accounting requirements, a board needs to dissolve the CIC according to policies laid out in the controlling document.
Taxes vs Accounts
There is an important distinction between statutory accounts and tax filings. Each year a company files both and both contain similar information. However, they are filed to different entities for different purposes.
Accounts are more robust and contain information that tax forms don’t require. It’s possible to convert an account for tax form use, but best to keep track of these separate.
The deadline for a CIC is often the most confusing element of accounts filing. The date corresponds to the founding of the company and not a pre-set calendar date. The account reference date lands on the final day of the month the incorporation took place.
A company started in February 2018 sets its reference date on 28 February 2019. After the first filing, the date is the same calendar day each year after.
Filing deadlines are set by the reference date. The first filing is different for private and public limited companies. Private limited companies file 21 months after their reference date, public limited file 18 months after.
Remember, these deadlines differ from those of charity accounts. For those who have changed their legal structure to a CIC within the year both sets need to be filed but at different times.
Offline – By Post Only
Offline filing is the only option for CICs currently. The filing must include all associated paperwork. You need to allow enough time. Allow at least 4 weeks.
The following represents a checklist of items for review. Not all of these elements need including in a filing but doing them provides information for the statutory account and accelerates a timely account filing.
1. Letters, Receipts, and Bills
Gathering these documents helps to create a more comprehensive balance sheet, allows for better tracking of profit/loss, and most importantly gives context to the notes of an account.
It’s important for a company to keep these pieces of information on-hand to provide evidence to relevant numbers listed, but also helps fill-out the picture.
Keeping a robust treasure trove of raw data like this helps bookkeepers focused on the benefits of the account filing and not the chore.
2. 10 Digit UTR
This number relates to the CIC’s tax return. It is sent from HM Revenue which is also where to request duplicates.
This is different from the authentication code needed to file accounts online.
3. Bank Statements
In addition to letters, receipts, and bills bank statements provide corroboration fo deposits and transactions. Statements and other information need to add up.
Lost finances and unrecorded or under-recorded transactions create questions that need answers.
4. Income and Expenditure Report
It’s far easier to compile the profit/loss with an income and expenditure report. This covers not just the bare facts of money going into and out of accounts but provides broad headings that explain the why behind those movements.
An income and expenditure report expands to become a component of the accounts filing. It also makes up a large component of the annual report.
5. File with Companies House
This is but one of several places to file a completed report. This one can be done online or offline but online requires the CIC falls under certain earnings and financial benchmarks.
6. File with HM Revenue and Customs
The reports are online only. To complete this filing, CIC bookkeepers need to know their UTR.
7. Calculate Corporation Tax
Completing the calculation of taxes ensures that the profit/loss and balance sheets contain accurate information.
8. File CIC Tax Return
This precedes the account filing because it falls on a specific date range. Information from the last tax return filing needs to be included with the following account.
9. A Note on Accounting Software
Robust programs enhance accounting, saving time and reducing the occurrence of costly errors. Online software allows multiple managers at a CIC to access information and to routinely audit it for accuracy.
Seek professional Help
It takes a lot of effort to complete a set of CIC accounts. The numerous inclusions in the filing make it easy to miss a step and need to repeat the entire process. The Companies House requires a new fee for each submission, which adds up more in time than money.
Missing deadlines also subjects a CIC to fines. No exceptions are made to the deadline because of missing paperwork. Following checklists and verifying each document across multiple board members and bookkeepers enhances the process.
Rather than go it alone, reach out for help from KG Accountants and their years of expertise in the field.
All our fees are fixed.
By giving you a fixed and competitive price, we can take the worry away when it comes to preparing the statutory Accounts and Tax returns; allowing you to concentrate on running your business!
Arrange a FREE initial consultation.
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Categories: CIC Accounts, cic accounts, Community Interest Companies, Community Interest Companies Accounts, Community Interest Company Accounts
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