Too much information!
A new client recently asked me if there was any way that they could disclose less information in their accounts. All limited companies in the UK are required to file their accounts at Companies House annually. Once filed, upon payment of a very small fee or subscription, those accounts are available for anyoneto see. As a result, there is often good reason for companies to want to disclose less information in the accounts that they file. The accounts have to be prepared in accordance with relevant legislation but a very important exemption applies to small companies (as defined), who are able to file much reduced “abbreviated” accounts at Companies House. (Small companies generally don’t need an audit either, but I’ll discuss that another day). The exemption is a simple one, but one that I often find gets overlooked. Small company abbreviated accounts provide just a fraction of the information contained in the normal “full” accounts – crucially, important profit and loss account information can be omitted from small company abbreviated accounts and therefore filing abbreviated accounts allows the company to protect vital information, such as turnover and profit margins, from competitors eyes etc. Full accounts still need to be prepared, but these are for the shareholders only (HMRC will also want to see the full accounts but these will not be in the public domain). There may be good reason to file full accounts at Companies House, for example where results are good/growing, you may want the outside world to know this. But generally, especially for small private companies, less is more when it comes to filing accounts.
From time to time we also come across companies that have not only filed full accounts (when perhaps they could have filed abbreviated accounts), but they have also filed the detailed management information pages, which are often attached to the back of the accounts. The detailed management information does not form part of the full accounts and normally includes a breakdown of all categories of income and expenditure – and I find that when this information is filed, it is nearly always as a result of a mistake rather than a deliberate choice when filing the accounts.
So the message is make sure you know what you need to file and what you want to file – you need to keep within the rules, but the choice as to what you file is yours.Talk to Barnes Roffe today