Most people in business have heard about the changes brought in by the Companies Act 2006. Very simply, all limited companies need to be aware of them. Below are some of the changes, however, that affect SMEs immediately and over the coming months.

The first point to highlight is the change in the time limit for filing accounts:

Time limit reduction – After the year end, companies had 10 months to file their accounts with Companies House – now they have only 9 months.  That’s if they are a private limited company.  Public companies have only 6 months as opposed to 7.

This new rule applies to companies whose accounting year begins on or after 6^th April 2008.   So too do the following points.

Second – companies need to assess what size they are and what they may be in the coming months/year

Size limits:  What size is yours?

The size criteria of Small and Medium companies have changed.

The 3 defining criteria for a small company or group have increased to: Turnover <£6.5m (£7.8m gross) and Balance Sheet total <£3.26m (£3.9m gross) and 50 employees or less

A medium company or group is now defined as: Turnover <£25.9m (£31.1m gross), Balance Sheet total <£12.9m (£15.5m gross) and 250 employees or less.

Gross turnover is that which includes all inter-company trading and gross balance sheet total shows the total assets including any inter-company debt or credit.

In addition, medium companies can no longer file abbreviated accounts.  Although there were very few concessions given in abbreviated accounts for medium companies, the main one was non-disclosure of turnover.  This will now be removed.

The third and final point is about the audit threshold

So who has to have an audit?

All Medium companies are required to have an audit. 

To qualify as audit exempt, a company has to qualify as ‘small’ (2 out of the 3 criteria mentioned above (on a rolling three years) and have a turnover of not more than £6.5m AND total assets of not more than £3.26m.

If your company’s most recent year of trading looks like it may take you outside the audit exemption criteria, now is the time to talk to your advisers.  It is vital that you take advice early on so you can plan. 

These are just a few pointers for companies – especially those that are growing.  The new rules and regulations are more complex than stated above but noting these changes is a starting point. 

For further information contact Melanie Viner on 0114 280 2930 or email melanie.viner@gvt-sheffield.co.uk

www.gvt-sheffield.co.uk