A year end checklist for limited company accounting

Are you a limited company director looking to find out what your responsibilities are when it comes to year end accounts?

We’re here to help with our handy checklist.

What is year end?

Year end simply refers to the end of a business’s financial year. 

The year end is important because there are various accounts and reports which must be submitted to the government at this time. 

When is year end?

It depends. Limited company directors can choose their own accounting period – and the year end falls at the end of this period. 

However, the UK tax year remains the same (6 April – 5 April), and tax is due to be paid to HMRC on certain fixed dates throughout the year, regardless of when your business’s accounting period ends.

The date of your accounting period’s year end can affect things like cash flow and tax planning, so it’s always best to get an accountant help you work out the most advantageous accounting period for your business. 

What do I need to submit at year end?

As soon as your nominated accounting period ends, you’ve got a window of time to submit various documents to the government. Keeping track of these dates – which will be unique to your business – is very important as late filing will incur penalties. 

Looking for support?

If you're starting out or need some advice about becoming a sole trader or limited company, give our friendly team a call today. No matter your situation, we'll be able to provide expert guidance and accounting services to support your business.

 

  • Annual accounts (aka statutory accounts)

Every year you operate as a limited company you must send these to Companies House, HMRC, shareholders and those who attend general meetings. The annual accounts demonstrate where your company is financially.

Annual accounts include:

  • A profit and loss account (aka the Income Statement) – including sales records, running costs and details of profits and losses made
  • A balance sheet, indicating what the company owns, owes and is owed
  • Notes on the accounts – which include things like an explanation of accounting policies
  • Director’s report – summarises the current status of the company and its future plans
  • Auditor’s report – depending on the size of your company – smaller limited companies won’t need this.

These accounts are due to Companies House nine months after your accounting period ends.

If your company qualifies as a micro-entity, it might be exempt from submitting more detailed accounts in favour of simplified or abridged accounts. An accountant can give you guidance on this.

 

  • First accounts

If your limited company is new and you’ve never submitted accounts before, you’ll need to submit a first set of accounts to Companies House. Your first set of accounts include everything listed above – but usually cover a period of just over 12 months. This covers from the date you set up your company until the last day of the month a year later.

These accounts are due to Companies House 21 months after your accounting period ends.

 

  • Company tax return (aka CT600)

This detailed form sets out your tax calculation for your financial year and must be submitted to HMRC. The company tax return includes information from your accounts such as company income, capital allowances, losses and deficits and deductions and reliefs.

Your company tax return must also include the annual accounts you submitted to Companies House

The company tax return is due three months after your accounting period for Corporation Tax ends. This is usually the same period as your business’s main accounting period.

What should I do before year end?

  • Go through your accounts

Financial information such as money received and spent by the company, assets and liabilities and statements of stock should be kept throughout the year in accordance with International Financial Reporting Standards (or new UK GAAP). 

You should go through your company’s accounts for the year, ideally with your accountant. You should do this a few weeks in advance of your year end deadlines to allow enough time for completing any missing information.

  • Chase invoices

To avoid bad debt, make sure that all profits you’re declaring in your Company Tax Return have actually been received by your business. Otherwise, you could pay tax on money that isn’t yet in your bank account. 

Spend some time chasing unpaid invoices and make sure your books are reconciled as your year end deadlines approach.

  • Collate supporting documents

HMRC and Companies House can ask to see your financial records at any time. In the event that this happens, make sure your records are in order with receipts, invoices, bank statements, letters from suppliers to hand.

  • Remember VAT returns

If your company is registered for VAT, you’ll need to submit a VAT return four times each financial year. This means a VAT return probably coincides with your year end reporting requirements. 

You must do this in accordance with Making Tax Digital (MTD). Information on how to keep compliant digital records can be found on the GOV.UK website.

  • Consider deadlines

Due to different timeframes for submitting records to Companies House and HMRC, you may end up with different deadlines for submitting your accounts. 

For most small private limited companies, it’s possible to file accounts and tax returns together using HMRC’s online joint filing service, or using an HMRC-compatible software package. An accountant should be able to provide you with this.

  • Meet with an accountant

As year end approaches, this is a good time to chat with your accountant about the coming financial year. They will be able to lend their expertise to tasks like tax planning and strategies to boost your business’s financial health going forward. 

How long does it take to prepare year end accounts?

It depends largely on how well you’ve been keeping your company’s records throughout the year. The more organised and detailed your accounts, the more straightforward your year end submissions will be.

Be warned – badly kept accounts can take weeks to unpick.

laptop and notebook

Limited company accounting can get complicated and isn’t something we recommend a director tries to tackle alone – which is why working with a good accountant is so important. 

It may seem obvious, but don’t schedule your annual holiday or any major stressful life changes just before your business’s year-end. Running a limited company is a commitment, and as director you’re legally responsible for submitting accurate, clear and timely accounts, so make sure the important people in your life are aware this will be a busy time for you as you prioritise your year end submissions.

The good news is that a good accountant can make the process of preparing for year end straightforward and as stress-free as possible. If you already have an accountant and you’re in the dark about your year end obligations – it might be time to switch.

If you’d like to learn more about the accounting services we offer for both sole traders and limited companies, contact our team today!

More Blogs

Who pays corporation tax in the UK?

If you’re looking for information about corporation tax in the UK, explained in an easy-to-understand way, you’ve come to the right place. Read on to find out who pays corporation tax in the UK, how it is calculated and filed, the penalties for non-compliance, and top tips to keep on top of your corporation tax obligations.

Accounting Team

Why choose a specialist e-commerce accountant over a general accountant

Are your ecommerce sales soaring, but your profits aren’t increasing as much as you’d like? Are you worried that you may not be setting enough aside to pay your tax bill when the time comes? If you’ve been asking yourself any of these questions, it’s likely that you’ve already decided to look into hiring an accountant. The number of accountants out there can seem overwhelming, and it can be tempting to make your choice based primarily on price. However, can you be sure that a general accountant fully understands your type of business? That’s where specialist ecommerce accountants come in.

Accounting Team

The benefits of using an accountant for small business

Being a small business owner means wearing many hats. With so much to do, it can be challenging to stay on top of it all. To help ease the load, many entrepreneurs turn to accountants for extra support to ensure the financial well-being and overall success of their businesses. Serving as financial custodians, accountants for small businesses play a crucial role in maintaining accurate and compliant financial records, ensuring adherence to the complex regulatory landscape. Beyond the traditional scope of bookkeeping, they are instrumental in strategic financial planning, offering insights into budgeting, cash flow management, and tax optimisation. Accountants act as advisors, guiding small businesses through economic uncertainties and helping them navigate changing tax laws. Their expertise is not only pivotal in avoiding compliance issues and potential audits but also in providing essential support for sustainable growth.

Accounting Team