Your year-end accounts
Your company’s ‘year-end’ is the date your accounting period ends. It’s usually the anniversary of setting up your company, but it can be changed.
You will need to make sure you send the right information to HMRC and Companies House within the right timescales to avoid penalties.
Company Tax Return
Your Company Tax return is also known as CT600. It contains details of your company’s income, less tax allowances and expenses. What remains is the profit that will be used to calculate how much Corporation Tax your company will pay.
Annual Accounts or Statutory Accounts
You must send several pieces of information to HMRC:
Income Statement – in this document you will show the profit (or loss) for the accounting period.
Statement of Financial Position – this is a snapshot at your company’s position at the end of the accounting period, along with the total value of your business based on its assets, liabilities, capital, and reserves.
Footnotes – these allow you to include information about the transactions between your company and its directors such as loans, advances and guarantees.
Filed at Companies House
Normally, small businesses need to submit two documents from their Annual Accounts to Companies House; the Statement of Financial Position and the Footnotes.
These will be published on the Companies House website and can be viewed by anyone.
Preparing for your year-end
There are some things you will need to do before your Company Tax return and year-end-accounts can be produced.
Expenses - all your allowable business expenses should be accurately recorded because these can be offset against your profits. Making sure you include all your expenses means you will pay less Corporation Tax.
Overdue invoices - your company’s year-end accounts should give an accurate picture, so credit control in the final weeks and months is important. Once you have the money in your company bank account, you can make sure your accounts are properly reconciled.
Paperwork - you will need invoices, records and receipts to back up your accounts. You might need to ask for statements of account from your suppliers, download copies of bank and credit card statements from your bank, and make sure you have records of any other income you receive, such as interest on savings. The HMRC can ask about information going back six years, from the end of the company accounting period they relate to, so in practice you should keep seven years’ worth of details.
Deadlines for your year-end accounts
The deadline for your tax return is 12 months after the end of your company’s accounting period. However, your Corporation Tax bill must normally be paid nine months and one day after the end of the accounting period, or within 21 months of your registration date if it’s your first return.
Penalties for missed deadlines
The penalties for late filing increase with time. If you miss one or more deadlines on more than one occasion, it will be costly.
Penalties from HMRC
|
Overdue by: |
Fine: |
|---|---|
|
One day |
£100* |
|
Three months |
An additional £100* |
|
Six months |
Your Corporation Tax bill will be estimated, and a 10% penalty will be added to the unpaid tax |
|
12 months |
Another 10% of any unpaid tax will be added |
*If your tax return is late three times in a row, the £100 penalties are increased to £500 each.
Penalties from Companies House
|
Overdue by: |
Fine: |
|---|---|
|
Up to one month |
£150 |
|
One to three months |
£375 |
|
Three to six months |
£750 |
|
Over six months |
£1,500 |
If you are late filing with Companies House for two consecutive years, the penalties double.
You can be fined, and your company can be struck from the Companies House register if you don’t send your accounts or Confirmation Statement when they are due.
Other things to think about at year-end
VAT - if your business is VAT registered you will probably also have to make a VAT return at your company year-end. It’s important not to miss this deadline while you are busy finalising all your other figures.
Confirmation Statement - as a director you must confirm your company information with Companies House once a year. You can be fined personally, and your business can be struck off the Companies House register of you don’t file your Confirmation Statement within 14 days of its due date. It’s normally due a year after your company’s incorporation or the date you last completed a Confirmation Statement.
A good time to review - for many businesses, year-end is a good time to do some tax planning based on the likely tax position for the coming year. It is also a good time to review the credit history of your customers and to check that you continue to receive good value and good service from your suppliers.
Testimonial
"I wanted a hands free bookkeeping service so I could focus on my business not my accounts. Lucie provides a fast, friendly and above all professional service that matches my needs perfectly."
Terry Ruddy - Streetwise Digital Marketing Ltd