Number of employees in annual accounts?

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Dear all, Is it correct that since this year it is mandatory to state the number of employees of a limited company in the annual accounts? In our previous accounts there was never any mention of employees. Thank you. L      

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By Tim Vane
14th Dec 2017 11:43

Yes, the average number of employees must be stated.

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By Mr_awol
14th Dec 2017 12:12

Depending on the accounting standard under which the accounts are prepared, it may not be necessary - but I've only done one set this year which didn't require it.

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Replying to Mr_awol:
By Tim Vane
14th Dec 2017 12:35

Mr_awol wrote:

Depending on the accounting standard under which the accounts are prepared, it may not be necessary - but I've only done one set this year which didn't require it.

Surely as it's required by the Regulations then it is irrelevant what accounting standard is used??

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Replying to Tim Vane:
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By Mr_awol
14th Dec 2017 15:42

Tim Vane wrote:

Mr_awol wrote:

Depending on the accounting standard under which the accounts are prepared, it may not be necessary - but I've only done one set this year which didn't require it.

Surely as it's required by the Regulations then it is irrelevant what accounting standard is used??

Depends on how old the accounts are that are beign prepared.

Like I said - I've only done one set of accounts this year that didn't require it. But that doesn't mean that it has to go in 'every' set of accounts. FRS 105 early adoptors, for example, were under no obligation to include it.

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By Cheesy-peas
14th Dec 2017 12:46

Think you'll find you need to for FRS102 but not for FRS105

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RedFive
By RedFive
14th Dec 2017 13:42

FRS105.....you do now

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Teignmouth
By Paul Scholes
14th Dec 2017 13:50

Taxfiler has now added this to its 105 accounts and raises a query if you run the accounts without it. They provided a comprehensive explanation as to why, which made sense but I fall asleep with Accounting standards these days so can't remember.

Being a 60+ rebel, with nobody to discipline me, I haven't bothered!

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Replying to Paul Scholes:
Red Leader
By Red Leader
14th Dec 2017 14:23

Yes, I think it falls into the same category as not reporting non-taxable amounts on P11Ds.

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Replying to Red Leader:
Teignmouth
By Paul Scholes
14th Dec 2017 15:40

OMG - how long have you had to do that?

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Replying to Paul Scholes:
Slim
By Slim
14th Dec 2017 15:22

I noticed that too.

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By Tim Vane
14th Dec 2017 14:27

To expand on my earlier point, the simple fact is that the disclosure is required by section 396(A1) of the Companies Act 2006.

This trumps what is in FRS 105 or FRS 102 (essentially the ommission in FRS 105 was incorrect, which the FRC have now acknowledged and corrected)

EDIT - but I accept Paul's point that it is all just pizzing in the wind...

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Replying to Tim Vane:
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By Mr_awol
14th Dec 2017 16:00

Tim Vane wrote:

To expand on my earlier point, the simple fact is that the disclosure is required by section 396(A1) of the Companies Act 2006.

This trumps what is in FRS 105 or FRS 102 (essentially the ommission in FRS 105 was incorrect, which the FRC have now acknowledged and corrected)

EDIT - but I accept Paul's point that it is all just pizzing in the wind...

It is required by S411(1) - which, originally stated:
"In the case of a company not subject to the small companies regime, the
following information with respect to the employees of the company must be
given in notes to the company’s annual accounts—
(a) the average number of persons employed by the company in the
financial year, and
(b) the average number of persons so employed within each category of persons employed by the company."

Note the first line - companies not subject to the small companies regime (see S381 for definition).

So FRS105 wasn't incorrect, or an omission as such - it was based upon the companies act at the time of drafting FRS105.

Then along came SI2015/980 which altered S411 so that, rather than the whole thing applying only to companies which were not small, now only the classification aspect held that criteria.

SI2015/980 applies to accounting periods starting on or after 1 January 2016 - the same date as mandatory adoption of FRS105 and so from a practical standpoint your understanding is correct - that the disclosure should 'always' have been there for the majority of FRS105 accounts. The exception being FRS105 accounts commencing before 1 January 2016.

But, yes, it is all something of a pointless discussion, especially now that very few (if any) affected accounts are likely to be filed - and even if they were, it's no hardship to include this information.

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By thomas34
14th Dec 2017 18:12

Thank you Paul - so what we're saying is that for micro entities (FRS105) the number of employees should be added to the balance sheet for all accounting periods starting on or after 1 January 2017? My balance sheets will eventually contain all of the information originally contained in the notes to the accounts. I suppose it keeps all the standard setters happy (until the next anomaly and/or divergence from CA2006 is spotted).

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Replying to thomas34:
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By Mr_awol
15th Dec 2017 10:12

thomas34 wrote:

Thank you Paul - so what we're saying is that for micro entities (FRS105) the number of employees should be added to the balance sheet for all accounting periods starting on or after 1 January 2017? .

Kind of.

Your accounts will be comply with UK accounting requirements and disclosures if you wait for periods commencing 1 January 2017 - but they will not, strictly speaking, comply with the Companies Act, which requires the inclusion of this disclosure for periods commencing on or after 1 January 2016.

Personally I'd go with a practical approach - taking a 30 June 2017 year end for example, if I can box tick the disclosure in then I will. If it's going to take half an hour forcing in a manual note, then I might be tempted to ignore it. Not that I have very many clients for whom FRS105 accounts are prepared anyway TBH.

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