Group Accounts & Consolidation Exemption Checker

Companies Act 2006 section 399 starts with the legal duty. If a company is a parent at the end of its financial year, its directors normally prepare group accounts as well as individual accounts unless an exemption applies. A company that disposed of all subsidiaries before the reporting date is not required to find an exemption merely because it was a parent earlier in the year.

What is the small-group exemption from consolidated accounts?

Section 399 can exempt a qualifying small parent. The group must satisfy the effective-dated section 383 size conditions and the two-year rule where applicable. For periods beginning on or after 6 April 2025, the small-group limits are £15 million net or £18 million gross turnover, £7.5 million net or £9 million gross balance sheet total, and 50 employees. At least two conditions are required. Numerical size alone is not enough: sections 384 and 399 contain group-composition and eligibility restrictions.

What is Section 400 of the Companies Act 2006?

Section 400 is the larger UK group exemption route. It applies only where the company is itself a subsidiary and its immediate parent is established under the law of a part of the UK. The ownership or shareholder test, inclusion in qualifying higher-level group accounts, reporting date, accounts and audit basis, note disclosures and Companies House filing package must all be satisfied.

What is Section 401 of the Companies Act 2006?

Section 401 is the separate route involving a relevant parent not established under the law of any part of the UK. The company and its subsidiaries must be appropriately included in qualifying larger-group accounts. The accounting basis or statutory equivalence, audit, individual-account disclosure, Companies House filing and certified-translation conditions need their own review. Foreign parent accounts are not acceptable merely because they use a recognised national GAAP.

What is the difference between Section 400 and Section 401?

Exemption from group accounts vs excluding a subsidiary from consolidation

These are different questions. Sections 399 to 402 address whether the parent prepares group accounts at all. Section 405 and FRS 102 paragraphs 9.9 and 9.9A address whether a particular subsidiary is excluded when group accounts are otherwise required. A subsidiary is not excluded simply because it has a different business activity, or because information is expensive or difficult to obtain under the FRS 102 model.

What is Section 402?

Section 402 applies only if all subsidiary undertakings could be excluded under section 405. For FRS 102 periods beginning on or after 1 January 2026, paragraph 9.3(f) includes subsidiaries required to be excluded under paragraph 9.9 or permitted to be excluded for immateriality under paragraph 9.9A. Two or more subsidiaries may use the immateriality route only when they are not material taken together.

Can an intermediate parent avoid preparing consolidated accounts?

Potentially, through Section 400 or Section 401 where every condition is satisfied. The September 2024 FRS 102 wording effective principally from 1 January 2026 refers to an intermediate parent entity. The FRC clarified paragraph 9.3 for periods beginning on or after 1 January 2027 by referring to a parent entity, including an intermediate parent entity. This checker does not treat the 2026 wording as removing statutory small-group or Section 402 relief from an ultimate parent.

Can FRS 101 be used for consolidated accounts?

No. FRS 101 applies only to qualifying individual financial statements. If group accounts are required, they cannot be prepared under FRS 101. An exempt parent may still be able to use FRS 101 for its individual accounts if it separately meets the FRS 101 eligibility conditions.

What must be disclosed and filed when an exemption is claimed?

Sections 400 and 401 require the individual accounts to disclose the exemption and identify the parent preparing the higher-level consolidated accounts, with the required address information. The relevant higher-parent accounts, annual or consolidated annual report and auditor's report must be delivered within the filing period. For either route, documents delivered in another language must be accompanied by a certified English translation where Part 35 requires one.