When you own a business in the UK, you need to send your annual return to Companies House every year. This post will explain what is an annual return, what information you need to include it, how to send it, and what fines you might face if you send it late.
Directors can be fined personally in criminal courts for failing to file a Confirmation Statement, which is a crime. Companies House can also take the company off the record, which takes a long time and costs a lot of money to fix.
What is an Annual Return?
It is a record that lists the most important facts about your business, such as:
- The nature of a company’s operations
- Your registered office address as well as your SAIL address
- Share capital
- Contact information
- Directors’ information
- Shareholders’ information
Just like the name says, you have to file your yearly return with Companies House every year. However, you can send in your information more than once during the year that you have to finish your yearly return.
This lets you keep work information up to date without having to worry about being late. You can skip the wait by submitting the most up-to-date information about your business first. Then, you can file a new report with Companies House that includes the changes or updates to give correct and up-to-date information.
Do not mix up your yearly returns with your tax return or the annual reports for your business. That one is not the same as the other one, so you don’t need to file it.
Annual Return vs Confirmation Statement, What’s The Difference?
This process used to be called a “Annual Return” until June 30, 2016, when a similar form called a “Confirmation Statement” took its place. The Annual Return and the Confirmation Statement both have the same information. However, the Confirmation Statement will now also have information about “Persons of Significant Control” for the Companies House PSC Register.
A Person of Significant Control (PSC) is someone who:
- Has more than 25% of the company’s shares or vote power.
- Owns the company and has the power to choose or fire most of the board of directors.
- Is allowed to have a lot of power or influence over a business or other organisation, like a trust.
When Do You Need to Submit Annual Return?
If you forget to file your annual report by the due date, Companies House will either email you or send a letter to your business address to inform you. Most of the time, this limit is one year after you registered or one year after you filed your last yearly return. Keep in mind that you have to file your yearly tax return within 28 days of the due date, or you will be charged a fee.
Information to Include in the Annual Return
Here is the information that you need to include in your yearly tax return:
- Name of the company secretary and members, their date of birth, where they live, and other information.
- The number to call your company, Not if there isn’t another address, records will be kept at the listed address and one other checking site (SAIL).
- What kind of business you have (public or private) and how many shares it gives out. In some situations, you have to give information to your owners.
- Information about the most important thing that the business does. You have to pick your main business activity from a list of SIC (Standard Industrial Classification) codes in order to explain what your company does.
How to Calculate Annual Return
The Formula of Annual Return is:
Annual Return= Final Value of Investment – Initial Value of Investment / Initial Value of Investment * 100
How to Submit Annual Return?
There is no easier or more handy way to file your yearly tax return than through the Companies House WebFiling service. You can use a credit card or PayPal to pay about £13. It’s important to remember that you need to sign up for the Companies House WebFiling service before you can use this service. After that, the Companies House will give you a confirmation code at the address of your business to prove that you are who you say you are.
Besides that, you can also send your return through the regular mail. It will cost you £40 to send in your tax report. Fill out the yearly return form (AR01), and send it to Companies House with a cheque, and that’s all you have to do. When you send a cheque, you should write your business number on the back of it.
When Do You Have to Submit a Confirmation Statement?
It needs to be done 12 months before the due date and at least once a year. Usually, the due date is one year after the date you incorporated or the date you last filled out a Confirmation Statement. You have to send in a Confirmation Statement even if the business isn’t doing anything.
Penalties for Late Submissions or Non-filings of Annual Return
A penalty of around £5,000 might be assessed against you if you submit your annual return late or if you didn’t file it at all. Additionally, legal action may be taken against the business and the directors of the company. If the situation continues to deteriorate, your firm runs the risk of being shut down.
Quick Wrap-Up
In conclusion, filing your annual return with Companies House is a crucial responsibility for business owners in the UK. It’s vital to distinguish between the annual return and other financial reports. The evolution from the Annual Return to the Confirmation Statement, now encompassing Persons of Significant Control (PSC), was outlined.
Understanding when and how to submit these documents is key, with penalties and legal repercussions emphasized for late or non-filings. Utilizing the Companies House WebFiling service or traditional mail offers flexibility in submission methods, ensuring compliance and avoiding financial penalties. Stay vigilant to deadlines, incorporate accurate information, and fulfill your obligation to safeguard your business from potential legal consequences.
