Small Company Abridged Accounts

PLEASE BE AWARE THAT THE ECONOMIC CRIME & CORPORATE TRANSPARENCY ACT 2023 IS BEING IMPLEMENTED IN PHASES AND MAY CHANGE SOME OF THE TEMPLATES BELOW.

Note that the information below is subject to the Economic Crime & Corporate Transparency Act 2023. The Act includes measures intended to change how accounts are filed and what can be filed. It has now been confirmed that the reforms to accounts will take effect from April 2028. 

Changes to be introduced include:

• Annual accounts will have to be filed electronically.
• The option for small companies and micro entities to file abridged accounts will be removed.
• All companies will be required to file profit and loss accounts.
• A company claiming an audit exemption will need to provide an enhanced statement from the directors on the balance sheet.
• Companies will be limited in how many times they can shorten their accounting reference period.

In addition, Regulations applying to financial years beginning on or after 6 April 2025 increased company size thresholds. For small companies the turnover and balance sheet thresholds increased from £10.2m to £15m and £5.1m to £7.5m respectively. For micro entities, turnover increased from £632,000 to £1m and the balance sheet total increased from £316,000 to £500,000.

What Are These Templates For?

Small Companies (as defined by the Companies Act 2006) can at present choose to prepare and file a set of abridged or simplified accounts, provided they obtain unanimous shareholder consent. This collection contains the templates required to obtain shareholder consent. The templates in this collection are only relevant to Small Companies. This process will become redundant after April 2028 with the removal of the option for companies to file abridged accounts.

When Is A Company “Small”?

A Small Company means one that for the financial year in question and the preceding financial year, meets at least two of the following:

• annual turnover is not more than £15 million;
• balance sheet total is not more than £7.5 million; and
• average number of employees is not more than 50.

Key Points on Abridged and Micro Entity Accounts

Abbreviated accounts may no longer be produced by a Small Company (or a Medium Sized Company as defined by the Companies Act 2006). This means these companies must prepare and file the same set of accounts for their members as for the public record.

Small Companies must decide at the point they are preparing their accounts whether or not to abridge them (or prepare micro entity accounts if they are within the relevant thresholds). Micro entities have their own accounting regime and the form of abridged accounts they prepare are not the same as for Small Companies. In particular they do not require shareholder consent. 

Abridged accounts contain a reduced set of information when compared to full accounts. The full requirements for Small Company abridged accounts and the relevant balance sheet formats can be found in the Small Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015. There is also helpful guidance from the Institute of Chartered Accountants for England & Wales (ICAEW) on the subject. Our Guidance Note: Accounts & Audit also includes a discussion of abridged accounts for Small Companies and can be accessed here.

Shareholder Consent: What Is Required?

As unanimous shareholder consent is necessary for the preparation of abridged accounts, a statement is required to be made and delivered to the Registrar to indicate that the members have agreed to the abridgement.
Members may only give consent in respect of the preceding financial year.
If the company wishes to prepare abridged accounts on an on-going basis it must obtain unanimous shareholder consent each year. A rolling consent is not permitted.
Abridged accounts must be identified as such to the Registrar at Companies House.

The templates below are a useful set for directors, company administrators or advising accountants when completing the shareholder consent procedure.

Small Company Abridged Accounts is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.