Your year-end company accounts. Simplified.

James Haywood of Nottingham accountants Page Kirk provides a handy checklist to help your year-end reporting go as smoothly as possible.

As well as being complex and time-consuming, year-end accounts need to be accurate and timely in order to avoid hefty fines from HMRC. A good accountant will carefully work through the requirements with you and make you aware of what information is needed and when, as the time period is different for each limited company.

Changes during the COVID-19 pandemic

Due to the coronavirus and the disruptions caused, HMRC have offered an extension from nine to twelve months to companies who were due to file their accounts between 27th June 2020 and 5th April 2021 (inclusive). However, it is important to remember that HMRC still requires corporation tax to be paid within the usual time period of nine months and one day after your accounting period end date. This means you will need a range of accounts prepared in order to properly calculate your corporation tax.

What is included in year-end accounts?

A Company Tax Return (CT600) is sent to HMRC.
This includes records relating to income and expenditure, such as documents showing your company's revenue, expenses, allowances for tax and profit and loss account. It is important that your accountant produces this in a timely fashion, as it will be used to calculate your corporation tax.

Statutory Accounts – sent to Companies House
This is a summary of accounts which describes your company's current financial position and recent financial activity. Statutory Accounts are made up of:

1. Income Statement – Simply presenting the income and outgoings of your business in the form of profit and loss.
2. Statement of Financial Position – This is where your accountant will consider the total value of the company, taking into account assets (such as property, vehicles and stock) and liabilities, which can include debt and payables.
3. A Director's Report is sometimes used for larger organisations, where the director will comment on the position of the company and how it is expected to fare in the future.
4. Notes will be used by good accountants to stipulate important information.

Year-end Company Accounts Checklist

As well as the list below, the end-of-year is usually a good time to think about your VAT returns and complete your confirmation statement.

1. Understanding Deadlines
   The deadlines for each business' submissions depend on when the company was first formed. Your accountant will be able to advise on the important dates.
2. Gather Paperwork
   Throughout the year, you should aim to gather any records of expenditure or income as and when they appear. By storing your receipts, invoices from suppliers, bank statements and income records, you'll be prepared to submit your accounts on time and have the paperwork to deal with any discrepancies. Most quality accountants offer cloud accounting technologies that save on having to keep countless pieces of paper in your office.
3. Expenses
   Throughout the year, keep on top of any expenditure that is specifically for the use of your business. This often includes machinery and utilities, but may also include many other expenses that are less obvious. A good accountant will be able to help explain everything that qualifies.
4. Chase-up overdue payments in time
   Whether it's clients that haven't yet paid you or an outstanding balance that your company needs to pay, getting your invoices in order several months before your deadline date is essential. It is crucial that unpaid invoices from clients are noted as money owed to you rather than revenue.
5. New Staff Information
   Use this time to ensure that your current and newly-recruited staff have the correct pensions information, tax codes and National Insurance contributions.
6. Choose a reputable accountant
   Due to the complexity of year-end accounts,choosing a long-standing and reputable accountant may save you a lot of money. This is because experienced accountants know the rules like the back of their hand and are much less likely to slip up with poorly reported or inaccurate information, which might lead you to pay too much tax or hefty fines to HMRC.

If you would like any information on anything mentioned in this article, please do not hesitate to contact a member of our team by calling on 0115 955 5500 or emailing at enquiries@pagekirk.co.uk.