Medium-sized and large companies must include a strategic report in their accounts (Companies Act 2006, sections 414A to 414D). It gives the members a fair review of the business, the main risks it faces and how it measures its performance. Small companies are exempt but may include one.
Who needs one
- Medium-sized and large companies: required. Tax Optimiser includes the report automatically when the period’s accounts type is full FRS 102 and the company is medium or large.
- Small companies: optional. Tick Include a strategic report to add one. It is left out of filleted accounts, like the directors’ report.
The company’s size is worked out on the Period Overview; see choosing your accounts framework.
Writing the report
Open the period’s accounts and choose Strategic report in the left-hand menu. Each section has an Insert template link that fills it with starter text to edit; replace everything in square brackets.
| Section | Who needs it |
|---|---|
| Review of the business | Every strategic report |
| Principal risks and uncertainties | Every strategic report |
| Financial key performance indicators | Where they help explain the business; tick the box to add turnover growth, gross and operating margin and the current ratio, worked out from the accounts |
| Non-financial key performance indicators | Large companies, where relevant |
| Section 172(1) statement | Large companies |
| Engagement with employees | Companies with more than 250 employees |
| Engagement with suppliers, customers and others | Large companies |
| Streamlined energy and carbon reporting | Large companies (a low-energy user, 40,000 kWh or less, can say so instead) |
Anything you enter in a large-company section still prints for a medium-sized company.
Moving matters from the directors’ report
Section 414C(11) lets a company set out in the strategic report things that would otherwise go in the directors’ report, such as likely future developments. Describe them in Directors’ report matters set out in the strategic report instead, and the directors’ report states which matters have moved. The statement is tagged in the iXBRL.
Approval and signature
The strategic report is approved by the board and signed on its behalf by a director (section 414D). Enter the approval date and choose the signing director; the signature block prints at the end of the report.
Where it appears
The report is printed before the directors’ report and listed on the contents page. Its sections have no iXBRL tags, because the taxonomy has none for them; only the section 414C(11) statement in the directors’ report is tagged.
Checks before filing
- For a medium or large company the accounts cannot be filed without the review of the business, the principal risks, the approval date and the signing director.
- For a large company, Tax Optimiser warns when the non-financial KPIs, the section 172(1) statement, the business relationships statement or the energy and carbon report is empty.
- With more than 250 employees, it warns when the employee engagement statement is empty, or when the directors’ report has no policy on employing disabled persons. Enter that policy under Company information.
See also: Audited accounts (beta).