New regulations came into force on 6 April 2015 to implement in the UK Chapters 1 to 9 of the EU Accounting Directive.  The Directive provides an updated EU-wide accounting framework for statutory accounts.  The new regulations apply to accounting periods starting on or after 1 January 2016, though early adoption is possible.

A significant change is to reduce the financial reporting burden for small companies. In particular:

  • The regulations adopt the maximum turnover and balance sheet limits for small companies allowed by the Accounting Directive, enabling a larger number of companies to access the lighter touch small companies regime.  The maximum permissible turnover limit is £10.2 million (up from £6.5 million) and the maximum permissible balance sheet total is £5.1 million (up from £3.26 million).  There is no change to the maximum number of employees (50).  There are equivalent increases to the limits for small groups.
  • The regulations reduce the number of compulsory disclosures small companies must make.  They also allow a small company to prepare an abridged balance sheet and profit and loss account, if approved by all the company's shareholders.

Other changes include:

  • Allowing companies in the same group as a non-listed public company access to the small or medium-sized companies regimes.
  • Allowing companies to use alternative layouts when preparing their profit and loss account and balance sheet, subject to certain qualifications.

The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015

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