An abbreviated account is essentially a tax return filed by a business in the United Kingdom. These filings are reserved for small companies that qualify to do so. The form is filed with the registrar of companies, the UK equivalent to the IRS. It is called an abbreviated accounts form because the companies that file are mostly the smaller and medium sized ones and the occasional limited liability partnerships company.
To qualify to file an abbreviated accounts form there are a three conditions a small company must meet. First, the turnover must not exceed 6.5 million pounds. Second, the company must not have assets or receivables exceeding 3.26 million pounds and finally, there should be no more than 50 employees working in the company.
Similarly, there are three conditions that a medium-sized company must meet in order to qualify to file the abbreviated accounts. First, the turnover cannot exceed 25.9 million pounds. Second, the assets and receivables should not exceed 12.9 million pounds. And third, there should be no more than 250 employees in the company.
In the same way, there are conditions that if met by a company, small or medium sized that would prevent them from submitting the easier to file abbreviated accounts. These conditions include the following:
- If the company was at any time a publically traded company during the previous financial year.
- If the company is an authorized insurance company, a bank or financial investments management company.
- If the company carries out what is considered typical insurance market activity.
- If the company is a member of an ineligible group.
Here is where it gets tricky: A group is ineligible if any of the members are:
1. A public company.
2. A corporate body, the shares of which are traded on the open market in any European country.
3. A person who works in financial services and works in a regulated field of investments.
4. A company that is an insurance, banking, e-money, or investment company.
5. A person that works in the insurance industry.
So even if the company itself meets the qualifications to file an abbreviated account, the company’s affiliations and nature of business can prevent it from filing the easy form at year’s end.
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