‘The motivator’

Small-medium business

“Forever short on time but always oozing passion.”

“Forever short on time but always oozing passion.”

Businesses that fall into this category are usually bigger than sole traders, and often involve more people (although this is not always the case).

Private limited companies and Limited Liability Partnerships [LLPS] prepare formal structured accounts that have set formats and disclosures.  These are filed on public record at Companies House, and for limited companies, also with HMRC.  Submission deadlines are normally based on the business’ year end date.

As the name suggests, for private limited companies and LLP’s there is a legal separation between the business assets and the owner(s)’ personal assets, so that any business liability will normally fall on the business to settle, and not the business owner – the owner(s) have limited liability.

‘The motivator’

Small-medium business

“Forever short on time but always oozing passion.”

Private limited companies and limited liability partnerships [LLPs] that are classified as ‘non-small’ under The Companies Act 2006, require not only to prepare formal statutory accounts for the shareholders/members, but also to have a statutory audit of those accounts.

A ‘non-small’ company is, generally, one where 2 of the following 3 limits are exceeded:

> Turnover – more than £10.2 million

> Balance sheet total – more than £5.1 million

> Number of employees – more than 50

These companies must prepare their statutory accounts in line with the full provisions of Accounting Standard FRS 102. Small companies are able to utilise the reduced disclosures in FRS 102, section 1A.

A statutory audit is an independent check of the full accounts (income statement; statement of financial position; strategic and directors report,; and the notes to the accounts), with an opinion on compliance given by the Auditor.

Statutory audits in the UK must be undertaken by a Registered Auditor, and comply with the International Standards on Auditing (UK and Ireland). Not all firms of accountants are also a Registered Audit Firm. If you are likely to require a statutory audit, check that the firm you are appointing is legally registered to perform the work.

What to consider when switching accountants:

Experience and qualifications – just because the word accountant is used doesn’t mean that any qualification is held. Look for a registered firm under a recognised accountancy body such as The Institute of Chartered Accountants in England & Wales [ICAEW], Certified Chartered Accountants etc. If the firm is not registered with a recognised accountancy body, it will not be monitored for professional standards. It may not even have Professional Indemnity Insurance if things go wrong.

Cost – this is a big one, ask the question on how you will be charged. Some firms will give you a set fee, others will charge you on a time basis.

How long has the firm been established? At times there may be long periods between speaking to your accountant; you want to be sure they will still be around when you need them.

Personality – do you feel you can work with the firm or individual, and do you trust the advice that is likely to be given?

Where is the work being carried out? Some firms will outsource the accountancy/tax work to another firm/organisation, often overseas. If this is the case, ensure you are happy with this arrangement.

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