Year End checklist for limited companies

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Business advice

A Year End comes but once a year (obviously), and can be a daunting undertaking for first-time limited company directors. However it needn’t be the end of the world – take it one step at a time and you’ll do just fine.

What is a Year End, anyway?

A ‘Year End’ is accountancy slang for the documents a limited company must file with HMRC and Companies House at the end of every financial year. What you must file depends on your company, but a Year End will always include two documents.

CT600_icon

Corporation Tax Return (CT600)

Filed with: HMRC

Contains: Broadly speaking, details of your company’s income minus any tax allowances and expenses. The remaining figure – your profits – will then be used to calculate how much Corporation Tax your company owes.

Abbreviated Accounts

 

Abbreviated Accounts

Filed with: Companies House

Contains: Details about your company finances which must be made public in accordance with the Companies Act 2006. This includes cash held in the company, assets, debtors and creditors.

What should I do to get ready?

Much like buying toilet roll, preparing for your Year End is not something you should leave until the last minute. Before you can prepare your CT600 and Abbreviated Accounts there a few bits of housekeeping you need to take care of.

Get your expenses in orderexpenses

Every Pound you claim as a legitimate business expense is a Pound off your company profits, and less profit means less Corporation Tax to pay. Before your Year End make sure you’ve claimed for each and every expense you can. Not sure if you can claim something? HMRC’s rule is expenses must be “wholly and exclusively” for business use, so if you bought something for your business – no matter how bizarre – you can probably claim it as an expense.

SalesRound up those overdue invoices

Your Year End should be as accurate as possible, so turn debt collector a few weeks beforehand and chase up any unpaid invoices you may have. Once you have the money in your company bank account you can record it properly, and reconcile your accounts in your accounting software, making sure they’re 100% accurate.

Collect paperworkCollect all your paperwork

As we’re always saying, accounts don’t mean squat without records to back them up. Before filing your Year End make sure you have records for everything – this can mean getting statements of account from suppliers, bank and credit card statements from financial institutions, and records of any other income you receive.

What else do I need to think about?

VAT ReturnsVAT Returns

If your company is VAT Registered (on either the Flat Rate or Standard scheme) you will most likely have a VAT Return due at the same time as your Year End. VAT Returns aren’t often thought of as part of a Year End, but they usually coincide with one. Make sure you don’t panic about your Year End and forget to file your VAT!

Annual ReturnAnnual Return

You should also think about your Annual Return. This is due 28 days after the beginning of your new company year, and is basically a summary of your company details. It includes company name and registration number, details of directors and shareholders, registered address and trading activity.

 

Financial planning

Financial Planning

The run-up to your Year End is the perfect time to think about some financial and tax planning, to help minimise your tax bill in the immediate future, and also the long-term. This can include paying money into ISAs, bringing your spouse or partner into your business, or channeling some of your income into a pension.

Review suppliersReview your suppliers

It’s a great idea to review your service providers once a year anyway to make sure you’re getting value for money – why not do it at your Year End? That way you can ditch any overpriced or unneeded suppliers and start afresh in the new financial year!

 

What happens if I miss the deadline?

To encourage limited companies to file their CT600 and Abbreviated Accounts on time, HMRC and Companies House have penalty regimes for those who miss the deadline. These penalties increase with time, so if you’re continually tardy to the filing party you can expect it to cost you dearly!

CT600

CT600 late filing penalties

If you miss your filing date £100
If you still haven’t filed after 3 months £100
If you file late three years in a row All penalties increase to £500

Abbreviated Accounts

Abbreviated Accounts late filing penalties

Up to a month late £150
Up to 3 months late £375
Up to 6 months late £750
Over 6 months late £1,500

Stack of Books designed by Cengiz SARI, Receipt designed by Kevin Kwok & Price Tag from The Noun Project, photo by John Shultz