20 Mar, 2020 09:00 AM
Admin Category: Business Advice, Company Formation,

Annual Accounts vs Annual Return vs Confirmation Statement: A Holistic View

Annual Accounts vs Annual Return vs Confirmation Statement Explained

Annual Accounts

Company’s annual accounts, also known as the ‘statutory accounts’ , are prepared at the end of your company’s financial year to provide an overall view of your company’s financial state.  It is a single document that must be written clearly and according to the regulations established in the commercial code, the companies law, and the general accounting plan to be provided to- all shareholders, people who can go to the company’s general meetings, Companies House and HMRC as part of your Company Tax Return. 

The purpose is to show the authentic image of the company’s assets, its financial situation, and the results obtained through legal provision. Thus, annual accounts are formed based only on economic reality and not the legal form

What do you have to include in the annual accounts?

Your Annual Accounts must include a clear view of: 

Balance Sheet

The initial document which shows the value of everything the company owns, owes and is owed on the last day of the financial year. The balance sheet also shows the overall net worth of your company. 

Income Statement

The report which shows the company’s sales, running costs and the profit or loss it has made over the financial year. It is one of the three major financial statements that all London Accountants prepare to report on their financial performance. In brief, the income statement provides in-depth information for through annual accounts.

Director’s Report

At the end of each fiscal year, private limited companies are required to provide a director’s report. The report consist the name and the signature of the director on the balance sheet. Only larger companies are required to produce such report; small companies or micro-entities are exempt.

Auditor’s Report

You might have to include an auditor’s report depending on the size of your company. An auditor’s report provides an opinion on the company’s compliance with standard accounting practices. 

Changes of Ownership or Issue of Shares

Every company has to reflect its equity status in this section. The outcome will be more productive, the more information it includes.

Liquidity Changes 

The liquidity of the business is evident in this slice of the annual accounts. It informs about the monetary changes that have already appeared on the balance sheet. Its purpose is to clarify any cash movement.


It is to be understood as a compliment as a conclusion. The ideal place to explain any financial statement of a company is the closure of the annual report.

What standards your annual accounts must meet?

Your annual accounts must meet either:

International Financial Reporting Standards

New UK Generally Accepted Accounting Practice

What are the basic requirements for the HMRC to accept your annual accounts?

Not to mention the standards but also there are some basic requirements your company must meet while making annual accounts. Fulfilling the requirements provide legitimization and reasons for HMRC to accept your annual accounts. 

Faithful Representation 

The financial statements and information requires the numbers and descriptions to match what really resisted or happened. Faithful representation is necessary because most users have neither the time nor the expertise to evaluate the factual content of the information. 



All the information provided in your annual account must be verified and used consistently by investors and creditors with the same results. This basically refers to the trustworthiness of the financial statements. Companies must be aware to provide the reliable information to the users otherwise they will not only be cheating themselves but also will create a dispute to the external parties. 


The annual accounts require not to leave any room for doubts. Thus, while addressing your accounts, be as transparent as possible and strive to eliminate any expendable complications. Clarity lets reasonably informed users to see the significance of the information provided in the annual accounts.

Annual Return

The Annual Return provides a compilation of general information regarding your company’s directors and company secretary if you have appointed one, departments, the registered office, shared capital and shareholders. Every year, all limited companies in the UK must submit an Annual Return form (AR01) to Companies House. The Companies House will confirm that the information you hold about your company is correct.

What do you have to include on an Annual Return-AR01 form?

Taj Accountants suggests you must include the following information in your Annual Return form:

Your Company Name

Company registration number

Company type (private, public, etc.)

Company registered address

Principal business activities

Company Secretary details (if you have one)

Company director details

The ‘made-up date’ (the date to which the return is made up)

Details on the issued share capital

Shareholder details

Whether or not the company has traded during the past year

If your company happens to have a share capital, then the annual return must also include the following:

The minimum value of total share capital that was issued

It must also contain the name of shareholders, the number of shares that they own, type of shares, and any transfer details of shares between fellow shareholders


Who is accountable for filing an AR01?

Company directors are legally required to file an Annual Return- AR01. London Accountants are required to file their annual return to the company house within 28 days. On the contrary, it is a criminal offence to fail to deliver your Annual Return within due time. If you do not submit your return, or file more than 28 days after your company’s ‘made up date’ your company will face penalties. 

What are the requirements to be complied with your AR01?

There are certain statutory annual requirements that you should comply with including:

Filing Annual Returns

Self-Assessment Tax Returns

Annual Accounts

Pay as you Earn (PAYE)

Corporation Tax

Quarterly VAT Returns

When do you need to update your AR01?

This refers to the date by which all required information regarding an annual return ought to be up to date. The updated date emerges within 12 months after the company’s incorporation or the last time by which the company files the annual return at the Companies House.

Annual returns provide you with an authentic measure of your company’s measurement structure and the amount of capital at its disposal. Every year, Companies House will write to your registered address informing you of the need to submit your Annual Return. 

When must the Annual Return be delivered to Companies House?

You should note that annual returns should be filed to the Companies House within 28 days after the date of the update written on the form. One must not forget that you must pay the document-processing yearly fee when a company’s director is filing the annual return.

How Does Annual Accounts Differ from an Annual Return (AR01 Form)?

Both of the concepts differ from one another at the same time business directors are required to file them both to the Companies House. The key differences lies as following: 

Annual accounts look at different factors of your company while annual returns essentially provide a snapshot of your company’s information and its overall make up.

Annual return contains the general information on your directors, secretaries and also their business addresses. 

Rather than assessing your company’s initial information Annual Accounts instead take a closer look at your company’s financial records. 

Typical Annual Accounts will contain key information such as profit and losses; a director’s report; an auditor’s report and some kind of balance sheet detailing the business assets or any debts that it might have to pay. Annual returns will contain the information on the company’s shareholding and its overall share capital.

In brief, Annual Returns look at your company whilst Annual Accounts look at more at how your company has been performing.


UPDATE: From 30 June 2016 Annual Return has been replaced by Confirmation Statement.

Confirmation Statement: 

A confirmation statement (CS01) is a snapshot of general information about a company's directors, secretary (where one has been appointed), registered office address, shareholders, share capital and people with significant control. Confirmation Statement (CS01) is a filing requirement that was introduced on 30th June 2016. It has replaced the annual return (Companies House form AR01) but serves exactly the same purpose in a simplified format. 

What is the purpose of the confirmation statement?

The purpose of the confirmation statement (Companies House form CS01) is to verify that important company data registered at Companies House and displayed on the public register is accurate and up to date. The confirmation statement contains details of its directors and shareholders, while the confirmation statement of an LLP lists its members. If any information held on record is inaccurate or out of date when the confirmation statement is due, the company should update the information on the relevant separate form beforehand, or at the same time as delivering the confirmation statement.

Who is accountable for filing a confirmation statement?

Every year the company directors, company secretaries and designated LLP members are legally responsible for filling a confirmation statement to be delivered to Companies House. Almost all companies and limited liability partnerships (LLPs) including dormant companies registered in the United Kingdom must deliver a confirmation statement to Companies House at least once every 12 months.  The statement must be reached to the Companies House within 14 days.  

What details should be provided in a Confirmation Statement?

Your company’s confirmation statement must include the followings:

Company name and number

Location of the company’s statutory registers (i.e. registered office or SAIL address)

Principal business activities (Standard Industrial Classification (SIC) codes)

Name of each shareholder

Shares held by each shareholder – class, quantity, and details of any transfers

Statement of capital

total number of shares of the company

aggregate nominal value of those shares

aggregate amount (if any) unpaid on those shares (whether on account of their nominal value or by way of premium)

For each class of shares, you’ll also need to provide the:

prescribed particulars of the rights attached to the shares

total number of shares of that class

aggregate nominal value of shares of that class

Trading status of shares

Persons of Significant Control

What is the confirmation statement filing deadline?

The due date is called the ‘confirmation date’, which falls on the anniversary of company formation or the ‘made up’ date of your last annual return. You must file a confirmation statement at least once every 12 months. 

What happens when you fail to meet the deadline?

Like annual returns, in case of confirmation statements; if you forget to file a confirmation statement by the deadline, you should file it as soon as possible. Whilst there are no automatic statutory fines for late delivery, it is a criminal offence if you simply don’t file it at all. Send it as soon as you remember to avoid facing any consequences for yourself and your company. The consequences may hinder the company officers as well as strike the company or LLP from the register.

How do I file a confirmation statement and how much will it cost?

Confirmation statements can be delivered to Companies House in one of three ways:

By post using paper form CS01 (or LLCS01 for LLPs)

Sending a paper confirmation statement by post comes in two parts and costs £40.00. There are also far more instances of paper filings being rejected due to errors or missing information.

Online via WebFiling

It is quicker, simpler, and more secure to deliver this document online, and it only costs £13.00. You will benefit from in-built checks and pre-populated data, which will make the entire process much simpler for you.

Online via a company formation agent 

A reliable accounting and bookkeeping service is a valuable asset to small limited London companies and multinational organizations alike. Taj Accountants has the expertise and insight to guide you through this process, providing specialist support so you can focus on the day to day running of your business.


How Does a Confirmation Statement (CS01 Form) Differ from an Annual Return (AR01 Form) and Annual Accounts?

The confirmation statement is more straightforward than the annual return because there is no need to enter previously filed information if there have been no changes in the past 12 months. If your company details are all exactly the same and you don’t have any changes to report, all you need to do is ‘check and confirm’ the information held on the public record and submit the confirmation statement. 

Annual accounts show the financial performance and activity of a company over the course of the previous year. A copy must be given to members, Companies House and HMRC. Whereas, Annual confirmation statements are used to confirm key details about the internal structure of a limited company or LLP on a certain date. They must be filed at Companies House at least once every 12 months. 

Previously, the requirement was to include a full list of shareholders every three years. This is no longer a requirement with the confirmation statement. As a result, you avail the information to the Companies House whenever you want to ensure that your information is up to date and correct. 

Moreover, now instead of having to provide a snapshot of your company data annually, you are only required to check and confirm that the information held by the Companies House is accurate and up to date. With the annual return (AR01 Form), you were required to file within 28 days from the anniversary of the incorporation of your company. This period is now 14 days.

Finally, there is the introduction of the requirement to provide a list of people with significant control (PSC) at the time of filing your first confirmation statement.

In Conclusion, 

The above discussion has provided you a holistic view on the three aspects- Annual Accounts, Annual Return and Confirmation Statement. Company directors must develop their understanding regarding these three concepts so that they can make the right decisions and be proactive in their business dealings. When HMRC and Companies House have to make judgments about your company or have to assess your business situation, they will take into account the information provided in the company’s annual reports as well as limited company’s yearly returns or the company’s confirmation statement. So, they also need to focus on the key differences as many companies tend to confuse the terminologies all together. 

Taj Accountants would suggest you not to make mistakes and not to fill in incorrect information regarding your business, as it may give the wrong impression about your company and may open a dispute.

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