Introduction
Small UK SMEs regularly misfile statutory accounts due to common errors like deadline misalignment, incorrect format or tagging, missing disclosures, misclassification of company size, and uncoordinated HMRC/Companies House filing. Learning these five costly mistakes helps ensure accuracy and compliance.
What Are Statutory Accounts and Why Do SMEs Need to File Them?
Statutory accounts are annual financial reports that every UK limited company must prepare and submit to Companies House and HMRC. These filings form a legal requirement under the Companies Act 2006.
What documents are included in statutory accounts?
- Balance Sheet showing the financial position
- Profit and Loss account (P&L)
- Cash Flow Statement (for medium & large companies)
- Notes to the accounts
- Director’s Report
- Auditor’s Report (if not exempt)
Who Is Legally Required to File Statutory Accounts?
Every UK-registered limited company must file, but small and micro-entities qualify for simpler formats and exemptions.
| Company Type | Turnover (≤) | Balance Sheet Total (≤) | Employees (≤) |
| Micro-entity | £1 million | £500,000 | 10 |
| Small company | £15 million | £7.5 million | 50 |
These thresholds apply for financial years starting on or after 1 April 2025 (GOV.UK).
Why Does Filing Accurately with Companies House Matter So Much?
Because inaccurate, incomplete, or late filing can cost more than just money:
- Fines range from £150 to £1,500, depending on how late the accounts are
- Persistent errors may result in prosecution or company strike-off
- A rejected filing delays HMRC processing and affects corporation tax submissions
Paper and web filing of accounts will end from 1 April 2027, and the joint filing system (CATO) will close from 31 March 2026.
Is Identity Verification Mandatory for Statutory Filings Now?
Yes, starting from autumn 2025, all directors and Persons of Significant Control (PSCs) will be required to verify their identity with Companies House before they can submit confirmation statements, accounts, or make appointments. Failure to verify will result in the company being unable to submit filings or appoint officers, leading to legal and compliance risks.
What Are the 5 Most Expensive Mistakes SMEs Make When Filing Statutory Accounts?
OD Accountants have reviewed hundreds of filings, and these are the repeat issues businesses get wrong:
1. Have You Correctly Classified Your Business Size?
| Classification | Turnover | Balance Sheet Total | Number of Employees | Meet at Least Two Criteria? | Filing Requirements |
| Micro-Entity | Not more than £632,000 | Not more than £316,000 | Not more than 10 | Yes | Simplified statutory accounts. No need to file a directors’ report or profit/loss. |
| Small Company | Not more than £10.2 million | Not more than £5.1 million | Not more than 50 | Yes | Can use abridged accounts. Exemption from audit (with some exceptions). |
| Medium Company | Not more than £36 million | Not more than £18 million | Not more than 250 | Yes | Full statutory accounts, though some exemptions apply. |
| Large Company | More than £36 million | More than £18 million | More than 250 | Yes | Full statutory accounts, mandatory audit, detailed disclosures. |
2. What Are the Consequences of Misclassifying Your Company Size When Filing Statutory Accounts?
| Common Errors | Consequences |
| Misjudging turnover/employees | Rejected accounts or HMRC mismatch |
| Applying the exemption wrongly | Accounts considered invalid |
| Using micro-entity format incorrectly | Risk of penalties or re-filing required |
Tip: Always assess size status annually; growth or staffing changes may disqualify you from previous exemptions.
3. Are You Filing Before the Deadline Set by Your Accounting Reference Date (ARD)?
Most SMEs don’t realise that their accounting reference date, typically the last day of their company’s founding month, sets all filing deadlines.
- Companies House deadline: 9 months after your ARD
- HMRC corporation tax filing: 12 months
- Corporation tax payment: 9 months + 1 day
First-year filing exception: If this is your first time filing statutory accounts, you get up to 21 months from incorporation to submit to Companies House.
Miss it once, and Companies House will issue a late penalty. Miss it twice? The fine doubles.
4. Have You Used the Correct Digital Format and iXBRL Tagging?
From April 2027, only digitally tagged, iXBRL-ready accounts will be accepted. But even now:
- Incorrect iXBRL tagging can cause automatic rejections
- Manually prepared documents or PDFs may not comply
- Filing without inline tags can delay HMRC processing
OD Accountants already use trusted accounting tools that ensure compliance-ready iXBRL files, something many SMEs struggle with on their own.
5. Are You Omitting Legally Required Disclosures?
Even when using micro/small company formats, you still need:
- A correctly worded audit exemption statement
- Director approval signatures are dated correctly
- Comparative year data and specific footnotes
Missing these can lead to accounts being accepted by Companies House but rejected by HMRC, causing compliance issues down the line.
6. Are You Filing Separately and Inconsistently Between Companies House and HMRC?
This is more common than it should be. Here’s why it’s risky:
| Issue | What Happens |
| Filed with Companies House only | HMRC doesn’t receive tax data |
| Different data formats are used | Raises red flags for compliance review |
| The wrong documents were sent to either | Causes rejections and missed tax deadlines |
OD Accountants resolve this with integrated dual submission, ensuring everything is aligned across both platforms.
How Do OD Accountants Help SMEs Avoid These Costly Mistakes?
As a specialist firm supporting SMEs across the UK, OD Accountants brings experience, tech tools, and a systemised approach:
- Run a size classification check before each filing
- Track ARD and deadlines for Companies House + HMRC
- Provide iXBRL-tagged digital reports using compliant software
- Perform a pre-submission checklist to catch missing disclosures
- File with both agencies in one go to avoid inconsistency
What Happens If You Get Your Filing Wrong?
| Error Type | Penalty/Impact |
| Late submission | £150–£1,500 (Companies House fines) |
| Incorrect format | Rejection, re-filing, delays |
| iXBRL errors | Delays in HMRC processing |
| Misused audit exemption | Accounts deemed invalid |
| Filing inconsistency | Compliance investigation or penalties |
It’s not just the penalty, it’s the cost of reputational damage.
What Should You Do Next to Ensure You File Correctly?
- Double-check your company size
- Review your ARD and calendar the deadlines
- Ensure your accounting software supports iXBRL
- Don’t file manually, invest in expert-reviewed digital submissions
- Work with a firm that does dual filing to HMRC + Companies House
What’s the Best Way to Avoid These Costly Filing Mistakes?
Statutory accounts aren’t just another annual task; they’re a legal requirement that impacts your tax status, company reputation, and long-term financial health. Avoiding mistakes isn’t just about knowing the rules, but applying them correctly every year. Whether it’s misjudging your company size or missing critical disclosures, even small oversights can lead to serious financial and compliance consequences.
Need Help Filing Statutory Accounts Correctly?
At OD Accountants, we prepare and file statutory accounts for UK SMEs every day, accurately, on time, and fully compliant with Companies House and HMRC requirements.
Frequently Asked Questions
1. Can micro-entity companies skip filing statutory accounts?
No. Even if your company qualifies as a micro-entity or dormant, you are still legally required to file statutory accounts. However, you may be eligible to use simplified formats and skip auditing requirements if you meet the thresholds set by Companies House.
2. What happens if I miss the Companies House deadline by just a few days?
Even a 1-day delay triggers an automatic fine of £150, which doubles on repeat offences.
3. Are profit & loss accounts mandatory for all companies?
Yes, from April 2027, all companies, including micro-entities, will be required to file full profit & loss accounts with Companies House.
4. Will HMRC accept a PDF if Companies House does?
No. HMRC requires iXBRL-tagged accounts, not just a PDF. Submitting only PDF files risks delays or penalties.
5. Do I need to file the same way to both HMRC and Companies House?
No. They have different formats and portals, but OD Accountants ensures both filings are aligned and accurate.