Company Registration No. 04030245 (England and Wales)
Freeway UK Insurance Services Limited
Unaudited financial statements
for the year ended 31 December 2023
Pages for filing with the registrar
Freeway UK Insurance Services Limited
Contents
Page
Statement of financial position
1 - 2
Notes to the financial statements
3 - 10
Freeway UK Insurance Services Limited
Statement of financial position
As at 31 December 2023
31 December 2023
1
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
6
1,136,618
741,093
Tangible assets
7
537,221
613,598
1,673,839
1,354,691
Current assets
Debtors
8
1,058,333
1,584,248
Cash at bank and in hand
389,956
731,296
1,448,289
2,315,544
Creditors: amounts falling due within one year
9
(1,339,745)
(1,875,104)
Net current assets
108,544
440,440
Total assets less current liabilities
1,782,383
1,795,131
Creditors: amounts falling due after more than one year
10
(84,305)
Provisions for liabilities
(331,491)
(132,794)
Net assets
1,366,587
1,662,337
Capital and reserves
Called up share capital
100
100
Profit and loss reserves
1,366,487
1,662,237
Total equity
1,366,587
1,662,337
The directors of the company have elected not to include a copy of the income statement within the financial statements.true
For the financial year ended 31 December 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
Freeway UK Insurance Services Limited
Statement of financial position (continued)
As at 31 December 2023
31 December 2023
2
The financial statements were approved by the board of directors and authorised for issue on 18 September 2024 and are signed on its behalf by:
P McCracken
Director
Company Registration No. 04030245
Freeway UK Insurance Services Limited
Notes to the financial statements
For the year ended 31 December 2023
3
1
Accounting policies
Company information
Freeway UK Insurance Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 4, Abbots Park, Monks Way, Preston Brook, Cheshire, England, WA7 3GH.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Revenue represents commission and fees earned from insurance broking activities transacted during the accounting period.
Commission received on the sale of insurance policies is recognised at the point the policy is agreed and signed up to by the end user. Where third party finance is involved, commission is received when a customer takes out the finance agreement.
Where there are obligations to provide services, following the placement of the insurance policy, an element of income is deferred to cover any potential commission claw back.
Revenue received in relation to referrals is recognised at the point that the referral becomes a successful hire.
1.4
Intangible fixed assets other than goodwill
Intangible assets internally generated are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
3 years on a straight line basis
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Freeway UK Insurance Services Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
4
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures and fittings
20 - 33% on a straight line basis
Computers
20 - 33% on a straight line basis
Motor vehicles
33% on a straight line basis
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Freeway UK Insurance Services Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
5
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
Freeway UK Insurance Services Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
6
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.15
Contingent commission income and deferred income
The company has entered into binding agreements spanning from 2016 to March 2022 which incorporate arrangements whereby commission income earned from the sale of insurance policies may be subject to adjustments based on the ultimate loss ratios achieved. The deferred income recognised in the financial statements pertains specifically to portions of such commission income that management believes may need to be returned as profit share due to potential unfavourable adjustments stemming from increased loss ratios. Such arrangements reflect the inherent uncertainties and contingencies within the insurance sector, and the company continues to monitor and assess these deferred amounts with due diligence.
Freeway UK Insurance Services Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
7
2
Critical accounting judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
49
51
4
Directors' remuneration and dividends
2023
2022
£
£
Remuneration paid to directors
782,908
773,407
Dividends paid to directors
130,000
477,707
5
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(100,000)
(90,000)
Adjustments in respect of prior periods
(230,255)
(281,093)
Total current tax
(330,255)
(371,093)
Deferred tax
Origination and reversal of timing differences
198,697
68,954
Total tax credit
(131,558)
(302,139)
Freeway UK Insurance Services Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
8
6
Intangible fixed assets
Software
£
Cost
At 1 January 2023
908,385
Additions
545,413
Disposals
(16,562)
At 31 December 2023
1,437,236
Amortisation and impairment
At 1 January 2023
167,292
Amortisation charged for the year
133,326
At 31 December 2023
300,618
Carrying amount
At 31 December 2023
1,136,618
At 31 December 2022
741,093
Included within intangible assets are costs for software under construction totaling £954,313 (2022: £444,828) that will not be amortised until construction is complete
7
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2023
1,734,428
Additions
151,412
At 31 December 2023
1,885,840
Depreciation and impairment
At 1 January 2023
1,120,830
Depreciation charged in the year
227,789
At 31 December 2023
1,348,619
Carrying amount
At 31 December 2023
537,221
At 31 December 2022
613,598
Freeway UK Insurance Services Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
9
8
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
615,462
811,601
Corporation tax recoverable
100,000
200,251
Prepayments and accrued income
342,871
572,396
1,058,333
1,584,248
9
Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans
50,750
Obligations under finance leases
22,342
Trade creditors
229,862
435,098
Taxation and social security
70,829
79,423
Other creditors
493,864
594,119
Accruals and deferred income
472,098
766,464
1,339,745
1,875,104
10
Creditors: amounts falling due after more than one year
2023
2022
£
£
Other creditors
84,305
11
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2022
£
£
490,402
613,225
Freeway UK Insurance Services Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
10
12
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Purchases
Purchases
2023
2022
£
£
Other related parties
82,200
104,600
The following amounts were recognised as an expense in the period in respect of bad and doubtful debts due from related parties:
2023
2022
£
£
Other related parties
13,382
66,428
13,382
66,428
Other information
The nature of the relationship with Other Related Parties is that the company involved has common members of key management personnel.
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