If you’re a director of a limited company, the thought of working through your year-end accounts likely fills you with dread. We’re here to tell you it’s not all bad, and you will get into the swing of things! We promise.
Let’s dive into what needs to happen when your company reaches year end and go through some tips to make sure you’re prepared.
Your ‘Year End’ is basically the end of your company’s accounting period – you might also hear it called your accounting reference date. It’s the date that your company’s accounts are made up to at the end of its financial year.
Each limited company has its own financial year based on the company’s ‘birthday’ (the date you registered it with Companies House) and ending on the last day of the month.
It’s different to a tax year, which runs from 6th April – 5th April!
What do I need to file when my company year ends?
When your limited company reaches its year end, you’ll need to prepare:
Full ‘statutory’ annual accounts: This is a report on the company’s financial activities during the year, up until year end. It needs to be sent to all shareholders, people who can go to the company’s general meetings, HMRC (as part of your Company Tax Return) and Companies House.
Company Tax Return: Most businesses are required to submit this to HMRC online. You can only use a paper form (CT600) if you want to file it in Welsh, or you’re unable to file online due to a reasonable excuse.
Completing your Company Tax Return is a big one you need to jot in your calendar! Even if you make a loss or have no Corporation Tax to pay – it still needs to be completed.
What is the deadline for filing my company accounts and tax returns?
This is due 21 months after you’ve registered with Companies House
File annual accounts with Companies House
The deadline for this is 9 months after your company’s financial year ends
Either pay the Corporation Tax due or inform HMRC that your company doesn’t owe any
9 months and 1 day after your accounting period has come to an end for Corporation Tax
File your Company Tax Return to HMRC
12 months after your accounting period for Corporation Tax has come to an end
What happens if I miss any of my year end reporting deadlines?
Anyone who is late reporting information or paying their taxes will normally receive a penalty from either Companies House or HMRC. The deadlines are very strict, and some companies have even been struck off the register for failing to report on time.
If you are late, you’ll receive an automatic penalty notice to file your accounts, as well as a fine which can increase depending on how late you are.
Late filing penalties with Companies House
How late you are Measured from the date your accounts are due
Penalty Private Company or LLP
Penalty (Public Company)
1 month or less
Between 1 and 3 months
Between 3 and 6 months
More than 6 months
Late filing with HMRC
How late you are
An additional £100
HMRC will estimate how much your Corporation Tax bill will be, and add a penalty of 10% on top
Another 10% will be added of any unpaid tax
How can I get ready for my company year end?
Your year-end can be a tough and stressful time – especially if you are new to it all. Following these simple tips may help you get everything in order.
Begin to prepare
Make sure you begin your prep early, giving yourself plenty of time to get things in order.
It’s always important to remember your accounts must be backed up by records. So, ensure you have everything ready in case your financial reports are challenged. These are reports like bank statements, receipts, etc. It’s yet another reason why good bookkeeping habits are essential for every business!
Chase overdue payments
You’ll want your accounts to be accurate as possible, and the last thing you need is to pay taxes on money you don’t actually have yet. Crack down on your debtors before your reporting deadline to ensure you’re paid on time.
Sort your expenses out
Remember, you’re entitled to expenses! Claiming expenses will reduce your profits, which means you pay less Corporation Tax. Keep track of everything your company spends, and ensure you claim for anything you’ve used ‘wholly and exclusively’ for your business.
Ensure everything adds up. You don’t want your accounts to say one thing, and your supporting documents to say another. If you’re unable to get payments for some invoices, list them as outstanding debts owed rather than revenue and include any notes you think are necessary – for example, if you think you might not be paid by a customer, or if there’s currently a dispute.
Consider hiring an accountant
The easiest way to ensure things run smoothly is to hire an accountant. They can get to know your business and put your mind at ease if you have any burning questions or anxieties.
Is there anything else my limited company needs to think about?
There are other things to consider (some mandatory), they include:
If you’re VAT-registered and on the Flat Rate or Standard scheme, you may have a VAT return due around the time of your company year-end. Always ensure your VAT-returns are sent off on time and pay HMRC if needed.
A Confirmation Statement allows the director of a limited company to confirm their information with Companies House is up to date. You need to file this within 14 days of its due date (which is normally a year after your incorporation date, although you’ll need to submit one sooner if you need to report any major changes).
It’s a great idea to check your suppliers annually. For example, has the price gone up in the last year? Is the quality of service the same? Could you be getting a better deal elsewhere?
It’s also worth looking at your finances to see if there is anything you can do to be more tax efficient. For instance, by paying money into an ISA or putting more money into your pension. The good news is an accountant can help you with all of this and ensure you’re saving as much money as possible.
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About The Author
A creative content writer specialising across business, finance and software topics. I have a love for all things writing, and creating engaging, easy to understand content that helps everyday people! Learn more about Rachael.