One of the most common misconceptions we get from clients is the annual return reminder and an assumption that this is related to the accounts filing. It can also be a worry for clients when they get their first annual return reminder which usually comes with a big red header and slightly over the top warning!
If you own a Limited company, whether trading or not each year you are required to submit an Annual Return document to Companies House. The form is due once per year and usually, the reporting date is on the anniversary of incorporation, with the due date being 28 days after that.
Really, it serves two key purposes: Firstly, it prompts the company to bring any information which has changed up to date; and secondly it makes searching the information at Companies House easier.
The annual return is a document that contains general information about the company; the directors and secretary – new appointments/terminations, registered office address, shareholders and share capital. If any changes have occurred since the last annual return or if it’s the first year of trading any changes occurred since registration need to be noted here. It is only necessary for most purposes to go back to the last annual return and note any changes registered since that date.
The company is also required to notify details of the allotment of any new shares – who and how much as well as changes to the company’s total share capital
A paper version can be completed; however, it is recommended that you use the online filing service at Companies House. It is also recommended to set e-reminders where you can nominate up to 4 email addresses to receive a reminder email each year when the return is due. The main difference is that the paper version cost £40 and electronic version £13 (prices correct as of 21st March 2013). In order to electronically file you will need to set up a user account with Companies House and have the company authentication code.
Whilst there is no financial penalty for not submitting the annual return it can be seen on the public record as overdue and Companies House will usually put an action in to strike off the company if it is not received.
Remember that if you are not trading, you are still required to submit the annual return (as well as Dormant Company Accounts). The penalties for not doing so are exactly the same as if you have been trading.
It is the Director’s responsibility to ensure the annual return is completed properly, regardless of your trading position. Failure to do so can result in the director being disqualified in his/her role, large fines or the company can even be struck off Companies House register and dissolved.
At PAH Accounting we offer this as a free annual return completion service to our Limited Company clients. The only amount due being the £13 payable to Companies House. For further information feel free to contact us.