Compliance

Accounting reference date

Each company needs to set an accounting reference date (or “year-end” date) which it will prepare its accounts to each year. When the company is incorporated the year-end will, by default, be set as one year from the end of the month of incorporation. For example, a company incorporated on 16 August 2024 will prepare its first set of accounts for the period ending on 31 August 2025.

You can change an accounting reference date by shortening an accounting period as often as you like and by as many months as you like. However, there are restrictions on extending accounting reference periods, as follows:

• An accounting period cannot exceed 18 months in length unless the company is in administration

• A company cannot extend its accounting reference date more than once in five years except in particular circumstances.

Preparing and filing annual financial statements

All companies must prepare and publish financial statements on an annual basis that report on their performance and activities during the financial year.

These must be prepared in accordance with accounting standards, including the upcoming amendments to FRS 102, which will introduce a new model for revenue recognition and on-balance sheet lease accounting, effective from 1 January 2026.

Under Companies Act 2006, private companies must file their accounts with Companies House within 9 months of their accounting period end date, while Plc’s must file their accounts within 6 months.

Take a look at our audit requirements section, to find out if your company is required to undergo mandatory audits.

Audit requirements

Audits, whether mandatory or optional, offer a thorough review of your accounts to help ensure smooth business operations. Companies that meet the threshold are required to have their accounts audited to confirm their financial statements provide a true and fair view, in accordance with International Auditing Standards.

The new company size thresholds listed below, effective from 6 April 2025, stipulate the type of financial statements a company prepares and whether it requires a statutory audit. This means many small companies will no longer require mandatory audits, however businesses can still choose to have audits conducted voluntarily. Specifically, the new thresholds are increasing as follows:

• Micro entities: Turnover from £632,000 to £1 million; Gross assets from £316,000 to £500,000; Employee numbers remain at 10.

• Small companies: Turnover from £10.2 million to £15 million; Gross assets from £5.1 million to £7.5 million; Employee numbers remain at 50.

• Medium-sized companies: Turnover from £36 million to £54 million; Gross assets from £18 million to £27 million; Employee numbers remain at 250, with a consultation planned to potentially increase this to 500.

Read more in our factsheet

Tax

Companies are also required to account to HMRC for certain taxes. The main administrative requirements for each tax are summarised below:

Companies with taxable profits of £1.5 million or less are required to pay their Corporation Tax within 9 months and 1 day of their year-end. The corporation tax return (CT600) has to be filed with HMRC within 12 months. It's now mandatory to file both your financial statements and corporation tax returns electronically.

VAT returns will generally be submitted quarterly and must be submitted by day 7 of the second month following the quarter-end – for example a VAT return for the quarter to June must be submitted by 7 August. Companies can elect to account for VAT monthly. This has a cash flow benefit when the company is regularly in a position where it receives a refund from HMRC (input tax exceeds output tax).

Payroll compliance and benefits reporting

Companies with employees (including directors) are required to file numerous forms to report to HMRC and ensure the correct deductions are made from employees’ pay. 

Payrolling will become mandatory from April 2026 for reporting taxable benefits to HMRC in real-time, except for no/low interest loans and living accommodation. Employers will have the opportunity to voluntary payroll these two excepted benefits from April 2026.

Fully payrolled taxable benefits will remove the requirement to file Forms P11D and it is also proposed that payrolling will include Class 1A NIC, removing the need for a P11D(b) to be submitted.

Read more in our factsheet

Confirmation Statement

Every company must provide Companies House with an annual return known as the confirmation statement; this provides information about the company at its ‘legal return date’.

A company has 14 days from its legal return date to deliver its annual return to Companies House.

You can be fined up to £5,000 and the company can ultimately be struck off (effectively, cease to exist) if it doesn’t file the confirmation statement.

Company secretarial matters

There are other matters which need to be reported to Companies House as they occur, these include:

• Appointments or resignations of directors or company secretary
• Issues or allotments of shares in the company
• Company purchase of own shares
• Reductions in share capital
• Changes to the company’s Articles of Association