What is the Annual Return (AR01)?
Filing the annual return is a legal requirement in the UK.
If you are running a company in the UK, you must operate in accordance with the applicable legislation (e.g. Companies Act 2006). 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
Of interest to this article is the annual return (AR01 form, part 24 of the Companies Act 2006).
Notably, from 30th June 2016, the name changed from annual returns to a confirmation statement. Nevertheless, there is no much change in substance. The phrase “annual return” is still widely used (so we will use both terms in this article).
The Meaning of Annual Return
An annual return is a statement that you file at the Companies House to confirm that the information that they hold about your company is correct.
You must file annual returns at least once every 12 months.
Failing to file the confirmation statement while your company is in operation is a criminal offense and entails serious consequences. So, if you fail to file the confirmation statement within the stipulated time, you may face one of the following actions depending on the case circumstances:
- Removal from the position of director of the company;
- Prosecution (if you fail to file a confirmation statement at all);
- Companies House may strike the company off the register of companies assuming that your company isn’t carrying on business or in operation. If this happens then your company will cease to exist and all its assets will become Crown property.
Filing Annual Return/Confirmation Statement
Confirmation Statements (Annual Return) should be filed online through the Companies House web filing service or by paper form which may be sent by post. In either case, you will need to fill form CS01 (previously form AR01).
However, the amount of fees is different; you will pay £40 if you file your company’s confirmation statement on paper and £13 if you file electronically. Most people prefer filing the confirmation statements through the online portal. You should note that you cannot use paper form to file confirmation statement for your company if:
- The company is in the protected online filing scheme (PROOF)
- You need to file form 363
Details that Must be Provided in a Confirmation Statement (Annual Return)
- Company name and number
- Registered office address
- Made-up date of the return – date at which all information must be correct
- Alternative inspection location (SAIL address), if you use one
- Officers (directors and company secretary)
- Persons with significant control (PSCs)
Responsibility for Filing Annual Return/Confirmation Statements
The legal responsibility for filing the confirmation statement (annual return) of a company lies with the directors. If you have a company secretary, you may delegate the responsibility to him or her but always have in mind that you are ultimately liable.
You must ensure that you file at least one confirmation statement every 12 months. However, you may file as many confirmation statements as you wish within the 12 months so long as you give an interval of 24 hours between any two consecutive confirmation statements. If you have just registered your company, you will have to wait for at least 48 hours before filing its first confirmation statement.
Although you are not required to pay more than once in a year even where you opt to file several confirmation statements, companies rarely file more than the mandatory one confirmation statement in a year-probably in the interest of time.
The Importance of the Annual Return/Confirmation Statement
While filing a confirmation statement is a statutory requirement, it is not meant to merely increase your responsibilities as a director. It serves several important functions including:
- Keeping your company’s information on the official register up to date;
- Improving the quality of information on the official register;
- The fees paid when filing confirmation statements is an important source of revenue for the Companies House which needs money to maintain the register and to offer other services;
How does a Confirmation Statement (CS01 Form) Differ from an Annual Return (AR01 Form)
As noted above, confirmation statements replaced annual returns. This change took effect on 30th June 2016.
While there is no much difference, the following are worth noting:
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, 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.
For the official information on confirmation statements, click here.
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