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HMRC internal manual

Senior Accounting Officer Guidance

What is a qualifying company: Conditions for a qualifying company: Balance sheet totals

A company must satisfy certain conditions to be a qualifying company, see SAOG11210.

A company must be incorporated in the UK in accordance with the Companies Act 2006, see SAOG11220, for a financial year. It must also have a certain level of turnover and/or balance sheet total for the preceding financial year.

This page is about the balance sheet total condition. For guidance on the turnover condition, see SAOG11230.

The company will meet the balance sheet total condition if it has a relevant balance sheet total, either of its own or when its balance sheet total is aggregated with those of other UK companies in the same group, of more than £2 billion in the preceding financial year. For guidance on aggregation of balance sheet totals, see SAOG11270.

The relevant balance sheet total to take into account is the total of the amounts shown as assets in the company’s balance sheet at the end of the financial year.

For companies other than banks and insurance companies, this will include

  • unpaid called up share capital, plus
  • fixed assets, plus
  • current assets, plus
  • pre-payments and accrued income.

For banks this will include items 1 - 15 in Sch 2 SI2008 410.doc (Word 25KB).

For insurance companies this will include items A - G in Schedule 3 Section B SI2008/410 (Word 29KB).

In most cases it will be apparent even before the year end whether or not the company will meet the turnover and/or balance sheet conditions and so whether or not it will be a qualifying company in the following financial year.

Where however this is not clear the responsible officers of a company should seek the relevant figures as soon as possible after the end of the previous financial year to determine whether it will be a qualifying company for the current financial year. If they do not it may be too late for the person who is identified as the Senior Accounting Officer (SAO) to meet the main duty, see SAOG14000.

FA09/SCH46/PARA15 (2) & (7)