How to Prepare your End Accounts for Limited Companies

 For limited companies, year-end financial reporting is required. At the end of the fiscal year, you must notify HMRC and Companies House. Law requires financial year-end reporting to ensure tax compliance and to provide accurate information to the public, banks, shareholders, and potential investors.

The end of your company's accounting period is referred to as the 'Year End.' This is due to the fact that every limited company has a fiscal year that begins on the firm's "anniversary" (the date you began trading, as specified when you registered with Companies House). It expires the day before that date in the following calendar year, as opposed to the tax year, which runs from April 6 to April 5.

Operating as a limited company is one of the most tax-efficient ways of doing business, and it is a popular choice for many businesses because it can legitimately reduce the amount of tax you pay. This makes choosing an excellent limited company accountant a critical decision, and we can assist you by providing a cost-effective and comprehensive accounting solution.

Our skilled accountants in Bethnal Green will assist you at every stage of your business's development. We'll take care of all of your financial concerns, whether they're accounting, taxes, yearly reports, VAT, payroll, or anything else you might be concerned about. Aside from that, our accountants will provide in-depth guidance on how to lower your tax liability and increase your savings.

What details do I need to provide?

HMRC and Companies House benefit from financial year-end reporting because it provides valuable information about your accounting period. Companies House must receive your Statutory Accounts and HMRC must receive your Company Tax Return.

If this is your company's first accounting period, it may take a little longer than a year. You must file a second tax return for the account.

Tax Return for a Corporation

To pay taxes, you must submit your Company Tax Return form (CT600). The Statutory Accounts include information about your company's turnover, costs, tax allowances, and profit. This information will be used to calculate your corporation tax bill.

Accounts Mandatory

Companies House receives your Statutory Accounts (or Annual Accounts). They explain the company's financial operations during that fiscal year, primarily for HMRC and its shareholders. Producing statutory accounts also assists you in fully understanding your day-to-day operational costs and other critical financial factors as a business owner.

Important financial reporting deadlines

Please keep in mind that because you are submitting different documents to two different authorities, you must adhere to a number of different deadlines.

Because the deadline for paying corporation tax is earlier than the deadline for filing your Company Tax Return, your company may pay tax before filing its tax return. Your accountant can assist you in estimating the amount of tax due and resolving any overpayments at a later date. To ensure you pay the correct amount of tax, we recommend filing your tax return on time rather than waiting until the deadline.

What if I don't meet the year-end reporting deadline?

To encourage you to file your paperwork on time, both HMRC and Companies House levy fines if you fail to do so. These rise in value over time, so plan ahead and file on time.

Failure to report can result in your company being removed from the register, so take your responsibilities seriously. If you are late in filing your accounts, you will receive an automatic penalty notice and will have to pay a fine based on how late they are, as shown below:

What other reporting responsibilities do I have?

Although not legally required for year-end reporting, it is an excellent opportunity to perform other reporting responsibilities that may benefit the smooth operation of your company's finances. These are your VAT returns as well as your Confirmation Statement.

Returns on VAT

If your company is VAT registered, you will almost certainly be required to submit a VAT return at the end of the fiscal year. VAT returns are not always considered part of a company's year-end, but they frequently coincide with one.

Statement of Confirmation

You are required by law to update your company information with Companies House once a year (failure to do so may be deemed a criminal offence). The statement must be filed within 14 days of the due date, which is one year after the date of incorporation or the last statement filed, whichever is later. Even if your company is dormant, you must meet this requirement.

Our accounting checklist for the end-of-the-year

Year-end reporting necessitates a significant amount of time, data processing, and planning, so make frequent backups of your accounts and tax returns so that if you lose data, you can easily resume where you left off.

Our five simple steps will take the hassle out of preparing and filing your Company Tax Return and Annual Accounts with HMRC.

1. Complete all pre-planning tasks.

Allow enough time to prepare for the end of the year. Obtain account statements from suppliers, copies of bank and credit card statements, and records of any other revenue you receive at least a month in advance. As a result, orders and invoices will be chased, expenses will be filed, spending will be reduced, and all relevant documentation will be easily accessible as and when needed.

2. Gather all of your paperwork

Remember that you will need to provide supporting documentation for your accounts, such as bank statements, income records, invoices, and receipts. As a result, gather all of your paper and electronic documents to ensure you have all of your financial data on hand in case of a dispute.

3. Pursue any debts

Unpaid bills can cause major issues at the end of the year, so pursue any debtors as soon as possible so that you can credit your bank with as many payments as possible.

4. Perform any necessary housekeeping.

The more business expenses you declare, the less Corporation Tax you must pay.

5. Is your employee information up to date?

Payroll, benefits, and expenses are easy to overestimate when recruiting all year. Furthermore, if an employee claims costs but fails to provide appropriate receipts, you may be liable for tax or NI errors.

If you are seeking for information about taxation fees, business and accounting services, please visit our website Accounting Firms, where we will supply you with all of the necessary information on accounting, business, and taxes fees.