VW Taxation Ltd
End of Year Accounts Service
VW Taxation Guide to End of Year Accounts
The end of the year is exciting for many reasons, yet preparing your business year end accounts is certainly not one of the reasons. Every 12 months this process comes along where HMRC and Companies House expects to see the profits from your business.
The process is time-consuming, but can be a breeze if you have the services of an accountant to handle all the reporting requirements for the accounting period. The accounts of a company need to be meticulous and accurate, with all required information checked and verified to ensure accuracy for a companies progress throughout the year, therefore, this guide will explain the ins and outs of how to compile and file your annual accounts.
What Is My Financial Year End?
Year end annual accounts are a form of accounting that provides both HMRC and Companies House a thorough assessment of your company’s financial progress throughout the year. Companies House uses the information provided by a company to inform the public of a company’s operations and to also examine and oversee the services performed by a company throughout its financial year.
Once your year end accounts are compiled, the documents are recorded on a Corporation tax return to be submitted to HMRC in conjunction with the information being sent to Companies House. If this is your company’s first year end accounting session, the process may feel intimidating at first, but there is nothing to be concerned with if you kept good records during the year.
Year end accounts need to embody all of your company’s information for the year on a balance sheet, profit and loss statement, and a cash flow statement. Companies House accounts filing procedures will share this information on their website for the general public to view.
How Do You Read Year End Accounts?
Year end accounts are fairly easy-to-read, especially if you have been keeping thorough accounting records throughout the year. The accounts consist of a balance sheet, a profit and loss statement, and a cash flow statement.
The balance sheet is essentially a summary of how your business performed throughout the year based on assets, liabilities, and the losses and gains of your company compared to those features. All of the final sums of each of these sections will be calculated in boxes on the balance sheet, which will also show a listing of each item that is part of the calculation.
The profit and loss statement is much more comprehensive than the balance sheet, which is more of a quick view of the company annual accounts as an overview. The profit and loss account goes into much more detail of turnovers, and costs of sales throughout the year and will show calculations for each profit or sale in summary boxes along the sheet.
The cash flow statement exists to provide regulation and analysis of the flow of revenue both in and out of a company throughout the year. Whereas the profit and loss account simply records each transaction, the cash flow statement is more of a security check to validate that the cash was properly handled and received accordingly and will also show each and every transaction throughout the year with information showing how the transaction was settled and when.
Filing accounts at Companies House and a tax return to HMRC can follow after the year end accounts have been finished.
How Do You Prepare Accounting for Year End?
When it comes to doing your own year end accounting, accounts must be thoroughly correct with all of the qualifying information about your business productivity throughout the year. This will be very time-consuming and require a strict dedication to following all guidelines laid out by both Companies House and HMRC.
Accounts must be filed with both organisations, which is another great benefit of hiring a year end accountant. An accountant will not only perform the correct assessments, but they will also file accounts to Companies House and HMRC, saving you the hassle of navigating the process for two organisations.
Be sure that you keep accurate records throughout the year for your company, as this will save you the possibility of incurring penalties or paying corporation tax. Be sure all bank statements accurately reflect the information that is going to be found on the year end accounts.
Your balance sheet and profit and loss statements will need to be thoroughly reviewed and compared to the data verifying the transactions. Although you can certainly opt to do the process on your own, an accountant can provide expert advice along with completing the tasks for you.
Can I Prepare My Own Limited Company Accounts?
You can choose to prepare the year end accounts for your limited company if you wish. You will essentially take on the job of being an accountant, which can be very time-consuming.
Anybody can file their year end account summaries granted they include the balance sheet, profit and loss statement, and cash flow statement for their business. The business owner can choose to file the documents themselves or, they can use the services of an accountant to handle the process.
You can have an accountant login to the required systems to file for you or, you can take the accounts created by an accountant and file them online yourself. Whoever you choose to file your accounts, be sure you trust them with the information to protect your interests.
Limited Companies can be difficult to run, which is even more difficult if you choose to do all of the year end accounting on your own. Accountants and tax specialists make the process of preparing year end accounts for limited companies easier as this will basically remove the prospect of undertaking another job on top of the running of your business.
Hiring an accountant could also help reduce your 19% corporation tax liability on limited company profits. All of your company’s records will need to be perfect and every deduction maximized to ensure that you can maximise this tax rate, as well as ensuring that your limited company receives the best possible outcome on a tax return.
What Is the Deadline for Filing Accounts with Companies House?
The deadlines are fairly flexible; you will have nine months from the end of year reporting date to file. So no later than 30 September from the traditional 31 December assessment.
A penalty will be assessed if you do not meet the deadline for filing. Much like penalties that can incurred for filing a late tax return the penalty can increase the longer you wait to file.
What is my Accounting Period?
Your accounting period is the period of time that your company records its profits and losses within a calendar year. The most common model for a company’s accounting period is between 1 January and 31 December.
There is a difference between the above-mentioned financial year for a company and the fiscal year, which most commonly corresponds to HMRC’s period of collecting a tax return. This period typically runs from 6 April-5 April for tax purposes.
Contact VW Taxation for Year End Accounting Advice
For all of your accounting and tax needs, VW Taxation prides itself on meeting your expectations and easing the burden of compiling yearly accounts. Our expertly-trained team of accountants prioritises accuracy and client satisfaction with each account we work through.
Our team of accounting specialists are also prepared to ensure that every possible deduction is calculated for your company when tax season rolls around.