The Difference Between an Annual Confirmation Statement and an Annual Return

When running a company, it is essential to comply with various legal obligations to ensure that your business remains in good standing. Two important filings that companies must submit in the UK are the annual confirmation statement and the annual return. While these filings may seem similar, they serve different purposes and have distinct requirements. Understanding the differences between them is crucial for business owners, company secretaries, and accountants to maintain compliance with Companies House regulations.

This article will explain the key differences between an annual confirmation statement in the uk and an annual return, covering their purposes, requirements, filing deadlines, penalties, and more.

What Is an Annual Confirmation Statement?

The annual confirmation statement is a mandatory document that companies registered in the UK must submit to Companies House each year. It was introduced in June 2016 to replace the annual return. The purpose of the confirmation statement is to verify and confirm that the information Companies House holds about the company is accurate and up to date.

Key Features of an Annual Confirmation Statement

1. Purpose
   • The confirmation statement serves as an official verification of company details.
   • It ensures that Companies House has the most up-to-date information about the company.
2. Information Included
   The confirmation statement must include:
   • Company name and registration number
   • Registered office address
   • Principal business activities (SIC codes)
   • Details of company directors and secretaries
   • Shareholder details and share capital (for limited companies)
   • People with Significant Control (PSC) information
3. Filing Deadline
   • A confirmation statement must be filed at least once every 12 months.
   • The due date is 12 months after the last confirmation statement (or annual return, if applicable) was filed.
   • Companies can file more frequently if necessary (for example, if there are changes to company details).
4. Cost of Filing
   • Companies must pay a filing fee to submit the confirmation statement:
     • £13 for online filing
     • £40 for paper filing
5. Penalties for Late Filing
   • Unlike the annual accounts, there is no automatic financial penalty for filing a confirmation statement late.
   • However, failure to file it can result in the company being struck off the register or directors facing prosecution.
6. Making Changes
   • If any company details need to be updated (e.g., change of director, new registered office address), these must be updated separately before filing the confirmation statement.

What Is an Annual Return?

The annual return was a document that limited companies and LLPs were required to submit to Companies House before it was replaced by the confirmation statement in 2016. Like the confirmation statement, the annual return aimed to provide Companies House with an overview of the company’s details. However, it required more detailed historical information and was often seen as more complex and time-consuming.

Key Features of an Annual Return

1. Purpose
   • The annual return was used to report company details on a yearly basis.
   • Unlike the confirmation statement, it required businesses to re-enter information even if no changes had occurred.
2. Information Included
   The annual return contained:
   • Company details (name, number, and address)
   • Details of directors and secretaries
   • Information about shareholders and share capital
   • Business activity classification (SIC codes)
3. Filing Deadline
   • The annual return had to be filed every 12 months, with a deadline based on the company’s incorporation date.
4. Cost of Filing
   • The filing fee for an annual return was:
     • £13 for online filing
     • £40 for paper filing
5. Penalties for Late Filing
   • Late filing did not result in an immediate fine but could lead to the company being struck off the register if not submitted.
6. Replaced by Confirmation Statement in 2016
   • The annual return was discontinued in June 2016 and replaced by the confirmation statement to simplify the reporting process.

Why Was the Annual Return Replaced?

The UK government replaced the annual return with the confirmation statement to simplify the filing process for companies. The annual return was often seen as burdensome because it required companies to re-enter all their details, even if no changes had occurred. The confirmation statement allows businesses to simply confirm their details are correct, making it a more efficient and user-friendly process.

Key Considerations for Business Owners

 Ensuring Compliance

Failure to file a Confirmation Statement on time can result in penalties or even the company being struck off the register. Business owners must be vigilant about filing deadlines to avoid compliance issues.

Updating Information Before Filing

Since the Confirmation Statement does not allow changes to be made within the document, businesses should update details like director information, share structure, or registered office address before filing the statement. Filing online is faster, more secure, and costs less than paper submissions. Companies House encourages businesses to use digital services to submit their Confirmation Statements.

Understanding PSC Requirements

Since the introduction of Persons with Significant Control (PSC) requirements, companies must ensure they report any changes in ownership or control to Companies House before submitting their Confirmation Statement. Rather than waiting for the Confirmation Statement deadline, companies should keep records updated regularly to ensure compliance with UK corporate laws.

Common Misconceptions About the Confirmation Statement

1. It is not a tax return
   • The confirmation statement has nothing to do with taxes; it is solely for maintaining company records with Companies House.
2. It does not replace annual accounts
   • Companies still need to file annual financial accounts separately from the confirmation statement.
3. Filing multiple confirmation statements in a year does not change the filing deadline
   • If a company files a confirmation statement early, it does not reset the 12-month deadline.

Final Thoughts

Understanding the difference between an annual confirmation statement and an annual return is crucial for business compliance in the UK. While both documents serve to keep company records updated, the annual return (which was discontinued in 2016) required companies to re-enter details, whereas the confirmation statement simply verifies that information is correct.

By ensuring that the confirmation statement is filed on time each year, companies can maintain good standing with Companies House and avoid the risk of being struck off the register.