Do you feel fine when you think of your company year end? Or… Do you stress over what needs filing, when and how much work it might mean? Well… you’re not alone!
Running a business does come with a LOT of freedoms,
choosing to work in your jammies, having a cider a little earlier than you would normally and even working from home when you want! But it does also come with its responsibilities!
So… TO CLARIFY – this post is dealing with COMPANY year ends. If you are classed as a sole trader or General Partnership, the below does not apply to you. But keep on the lookout next week for one that will!
Most SME’s classed as “Companies” i.e LTD, LLP etc. will need to prepare and file the following:
> Year End Accounts
> Confirmation Statement
> Corporation Tax (CT600)
Who do you file them with, what do they entail and what help is there for them, if needed? Well let’s take each one in turn.
This is generalising a very complicated matter. For more in depth advice, please do check GOV.UK and search for “Company Accounts” to check what specific responsibilities you and your business may have.
Year End Accounts
Your Company Year End date will determine on when your business was incorporated and also when it started trading. If you are within your first year, you may have to file 2 lots of accounts at the year end to cover some difference in these periods. HMRC give guidance on this. But for simplicity sake, let’s assume you incorporated and started trading in the same month – March 2020 for example – brave! Your company year end date will then be 31st March 2021.
Generally your year end accounts will include:
Ø a profit and loss account
Ø a balance sheet signed by a director
Ø notes to the accounts
And accounts must generally be accompanied by:
Ø a directors’ report signed by a secretary or director
Ø an auditors’ report (unless the company is exempt from audit)
Companies do not have to use a professional accountant to prepare accounts. However, directors must be aware of their legal responsibilities!
Year End accounts are filed with companies house, this information – company worth, worth of shares etc. is then held and shown on their public database. You can search for any limited company on companies house and see their directors and last filed company accounts. This Is why these accounts need to be correct and accurate, and why things like expenses vs assets is such an important issue!
Unless you are filing your company’s first accounts, the time normally allowed for delivering accounts to Companies House is 9 months from the accounting reference date, for a private company.
Can we help? Of course we can!
Now, we do expect a business to have kept decent records of what money has been made and what has been spent. More than just totals, we (and any accountant) will need details on what the money was spent on and for, and even information about things like loans, mortgages, assets and things like that. If you do not like keeping records or find it difficult, we recommend some accounting software to help make life easier.
Talk to us about how we and QuickBooks can help you.
All companies must file and pay Corporation Tax. This is essentially a companies form of income tax. So, the employees who receive a wage or salary from the company pay income tax on their wages, companies pay corporation tax on their profits.
Similar to self-assessments for income tax there are also allowable and disallowable expenses for tax reduction. This still means that every expense needs to be recorded. Gaps in bank accounts or differences in bank balances or unreconciled accounts or transactions are an accountant’s worst nightmare, so whether it’s allowable or not, record it! Now, if something personal enters the business accounts, that would be disallowable, but this is where care is needed! IF YOU ARE VAT REGISTERED: you cannot claim the VAT on personal expenses through your business! It just gets recorded as if there was no VAT on it at all.
Corporation tax is currently set at 19%. As per the chancellors most recent budget, this is set to rise in 2023, but only for some businesses. Essentially the tax will range from 19% to 23% based on how much profit you made. The more profit, the more tax, same as income tax.
This Corporation Tax (CT600) gets filed with HMRC. You should have registered for Corporation Tax when setting up your company Your deadline for filing and paying your corporation tax is usually 9 months and 1 days after your year end date or ‘accounting period’.
Can we help? You know it!
Again, for Corporation tax good records are essential. As we said, allowable and disallowable expenses mean that we will need to know what money has been spent on and certain other information about some transactions. Personal things cannot be claimed against corporation tax! This is why we ALWAYS recommend having separate business and personal bank accounts and cards. It saves any messy records at the year end. And THAT my friends could save you money… read on 😉
Possibly the easiest of the lot, the confirmation statement to companies house is essentially a businesses register. It tells HMRC and companies house, as well as the public, are all the same directors still there, have any left, is there any change in ownership or control, business addresses or premises and even the amount of shares and their worth.
If there has been absolutely no change then it is really easy, but it still needs to get done! And don’t forget, this is where companies house will charge you the annual £13 fee for incorporating a company.
Can we help? What do you think?
We can act on your behalf to file all of this for you, we will ask the questions we need and get this all done for you to save you the time and hassle of logging in, scrambling around for a year old password you have never used again and all the stress that goes with these annual things.
How we can help
Our Silver and above monthly support packages mean that WE enter all your transactions for you and run a month end – monthly… naturally. This means that when your year end accounts come around, we know – and you know – that everything has been accounted for, checked, categorised correctly and claimed for where it should! This will mean that your records are up to date, clean, tidy and reports easily generated! As we use QuickBooks online it means that we can offer services to you no matter where you are, files, receipts and invoices can be uploaded electronically which means no need for a bin bag or box full of receipts! Everything at your fingertips and instantly accessible!
We charge £650 to file all three of these for your company.
Now, remember I said good records can save you money. That is because we (and other accountants will probably do the same) charge a £36 per hour bookkeeping charge if records are not kept well. This does not include us asking a few questions about a receipt we found for a Costa coffee or whatever. But rather, if you give us a bin bag full of receipts, we will need to spend hours inputting this information into a format HMRC expect it… so be prepared for a large bill, on top of your Corporation tax bill!
We are soon to be offering and highlighting our Company Accounts Clean-up service, so stay tuned if you are in need of being dragged into the 21st century with your accounts!
Let us know if this has been helpful, stressful or even enlightening. Talk to us if you think we can help in any way, or if you have any questions!
We would love to ensure that when the end of the world comes… I mean year… HA!... you will be sitting back sipping a tequila rather than tearing your hair out, not sleeping and wearing out your facepalm gif when messaging friends!
Speak to you soon!