If you run a small limited company, your company year end marks the end of the financial period covered by your annual accounts. After this date, your financial records are reviewed, your year end accounts are prepared and your Corporation Tax position is calculated.
For owner-directors, contractors and small businesses, the confusing part is often knowing what happens next. Your annual accounts, Corporation Tax payment and Company Tax Return have different purposes and can have different deadlines.
Here is what you need to know.
What Happens When Your Company Reaches Year End?
Once your company’s financial year ends, the accounting process generally involves:
- Bringing your financial records up to date.
- Checking for missing or unclear transactions.
- Preparing your annual company accounts.
- Calculating your Corporation Tax position.
- Reviewing and approving the relevant documents.
- Filing the required information with Companies House and HMRC.
- Paying any Corporation Tax due by the applicable deadline.
Your accountant can manage much of this process, but they will normally need information from you before the accounts can be completed.
What Information Might Your Accountant Need?
The exact information required depends on your business and how your records are maintained.
For a small limited company, your accountant may need information relating to:
- Business bank accounts
- Sales and customer invoices
- Supplier bills and expenses
- Payroll records
- VAT records, where applicable
- CIS records, where applicable
- Business assets or finance
- Money owed to or by the company
- Transactions involving directors
For example, a construction-related limited company may have CIS records that need to be considered alongside its other accounting information.
If your bookkeeping is already kept up to date, preparing for year end is usually much more straightforward. Our bookkeeping tips for businesses in Reading explain how good record keeping can make accounting deadlines easier to manage.
Why Might Your Accountant Ask Questions At Year End?
Sending your records to an accountant does not necessarily mean the accounts can be completed immediately.
There may be transactions that require clarification. Your accountant might need to establish what a particular payment relates to, whether an invoice remains unpaid or how money moving between a director and the company should be recorded.
This is normal.
Providing answers promptly can help prevent delays and gives your accountant the information needed to prepare an accurate picture of the business.
Company Accounts, Corporation Tax And CT600: What Is The Difference?
These terms are connected, but they do not mean the same thing.
Annual company accounts report financial information about your company for its accounting period.
Corporation Tax is calculated based on the company’s taxable profits after applying the relevant tax rules.
The CT600 is the Company Tax Return used to report the company’s Corporation Tax information to HMRC.
Your annual accounts therefore form an important part of the wider year end process, but preparing company accounts and dealing with Corporation Tax are separate responsibilities.
You can learn more about CG Accounting’s Corporation Tax and company accounts support.
Which Company Year End Deadlines Matter?
One of the most important things for directors to understand is that there is not a single year end deadline.
For an established private limited company, annual accounts are normally due at Companies House nine months after the company’s financial year ends.
For many companies, Corporation Tax is normally payable nine months and one day after the relevant Corporation Tax accounting period ends.
The Company Tax Return is generally due 12 months after the Corporation Tax accounting period ends.
This means your Corporation Tax payment may be due before your Company Tax Return.
First-year accounts and unusual accounting periods can work differently, so always check the dates that apply to your company. Current requirements can be checked through Companies House guidance on annual accounts and HMRC guidance on Corporation Tax.
What If This Is Your First Company Year End?
Your first year end can be particularly confusing because the deadlines and accounting periods may not work exactly as you expect.
If you have recently incorporated, it is sensible to check your company’s dates early rather than waiting until a filing deadline approaches.
This is also a good opportunity to establish better bookkeeping habits and understand what information your accountant will need each year.
Use Year End To Understand Your Business
Year end is not only about satisfying Companies House and HMRC.
Your accounts can also give you an opportunity to consider how the company has performed.
When reviewing them, think about questions such as:
- Has turnover increased or decreased?
- Are customers taking longer to pay?
- Have particular costs increased?
- Is the business carrying more debt?
- Does the Corporation Tax figure make sense based on the year you have had?
- Is there anything you want to improve during the next financial year?
You do not need to understand every accounting entry. However, directors should understand the broad financial picture and ask questions about anything unexpected.
Common Company Year End Mistakes To Avoid
Leaving Everything Until The Deadline
Missing information and accounting queries can take time to resolve. Starting earlier reduces unnecessary pressure.
Assuming Your Accountant Has Everything
Your accountant may have access to your records, but they will not automatically know what every unusual transaction relates to. Keep them informed of significant changes.
Confusing Tax And Filing Deadlines
Your accounts, Corporation Tax payment and Company Tax Return can have different deadlines. Make sure you know which date applies to each obligation.
Approving Accounts You Do Not Understand
Ask questions if something looks unexpected. CG Accounting’s approach is to explain accounting matters in straightforward language rather than expecting clients to understand technical terminology.
Frequently Asked Questions About Company Year End
Is Company Year End The Same As The Tax Year?
No. A limited company’s financial year is separate from the UK tax year. Your company has its own accounting reference date.
Do Small Limited Companies Still Need Year End Accounts?
Being a small company does not automatically remove your accounting and filing responsibilities. The exact requirements depend on your company’s circumstances.
What If My Bookkeeping Is Behind At Year End?
Establish what information is missing and speak to your accountant as early as possible. Records may need to be brought up to date before the annual accounts can be finalised.
What If My Limited Company Operates Under CIS?
Construction-related companies may have additional CIS records that need to be considered as part of their accounting information. Keeping deduction and payment records organised can make the year end process easier.
Make Your Company Year End Easier
Company year end is easier to manage when you know your dates, keep your financial records organised and deal with questions before deadlines become urgent.
CG Accounting Services Ltd supports small limited companies, owner-directors, contractors and construction businesses with company accounts and Corporation Tax, providing straightforward advice backed by 10+ years of experience.
If your company year end is approaching, learn more about our Corporation Tax and company accounts support or contact CG Accounting Services to discuss what you may need to prepare.