Completing accounts year-end in the UK is a process that all limited companies must go through. This process is critical for ensuring your business is compliant with HMRC and Companies House regulations. If you don’t do the right paperwork at the right times, you could be liable for some serious fines so it’s vital to understand all the relevant deadlines.
This article will provide a comprehensive guide on how to complete your company’s accounts, including who needs to do it, when it needs to be done, and what you need to send. We will also discuss fines for missing the deadline and other important reporting requirements.
What Does Completing Accounts Year-End Mean?
Completing accounts year-end means compiling all of your company’s financial information for the past 12 months into a set of statutory accounts. This includes your income statement, balance sheet, director’s report, and footnotes. Once these documents are finalised, you must file them with both HMRC and Companies House.
Who Needs to Do It?
Company directors are responsible for completing accounts year-end, even if they use an accountant to help with the process. If you’re a director of a limited company, it’s your responsibility to make sure everything is done on time and in compliance with the law. A limited company is one that has shareholders and limited liability.
When Does it Need to be Done?
The deadline for completing accounts year-end is usually 12 months after your company’s financial year-end. For most businesses, this will be the same as their calendar year. So, if your company’s financial year-end is 30th June, you would need to complete your accounts by 30th June of the following year.
What You Need to Send
There are various documents that need to be sent year-end. These include:
- Company Tax Return – This is a document that summarises your company’s income and expenditure for the year. It is used to calculate how much corporation tax you owe and must be sent to HMRC.
- Statutory Accounts – As mentioned earlier, statutory accounts are a compilation of your company’s income statement, balance sheet, director’s report, and footnotes. The balance sheet is especially important as it shows how much equity (net assets) your company has. Your director’s report is a summary of your company’s performance over the year, including its profits and losses. Your footnotes are additional notes and explanations about your accounts that can be helpful for understanding your financial position.
All of these documents must be sent to HMRC, Companies House, and (if you’re VAT registered) HMRC’s VAT division.
When to File Your Company Tax Return with HMRC
The deadline for filing your company tax return is usually nine months after your company’s financial year-end. So, if your financial year-end is 30th June, you would need to file your return by 31st March of the following year.
When to Send Your First Accounts to Companies House
If your company is less than 12 months old, you don’t need to send any accounts to Companies House. However, you must still file a Confirmation Statement, which is a document that confirms your company’s details are up-to-date.
If your company is more than 12 months old, you need to send your first set of accounts to Companies House within 21 months of incorporation. So, if your company was incorporated on 30th June 2021, you would need to send your first accounts by 30th March 2023.
When to File Subsequent Annual Accounts with Companies House
You must file your company’s annual accounts with Companies House within nine months of the end of your financial year. So, if your financial year-end is 30th June, you would need to file your annual, accounts by 31st March of the following year.
However, you don’t need to send your annual accounts to Companies House if all of the following apply:
- Your company is dormant (hasn’t had any activity)
- Your company doesn’t have any shareholders
- Your shares are held by a nominee shareholder
- You’re a private company that’s exempt from audit
This is because private companies that are exempt from audit don’t need to file annual accounts with Companies House. However, you must still file a Confirmation Statement (see below) confirming your company details are up-to-date.
When to Pay Corporation Tax to HMRC
You must pay your corporation tax bill within nine months and one day of the end of your financial year. So, if your financial year-end is 30th June, you would need to pay your corporation tax bill by 31st March of the following year.
How Much are Fines for Missing the Deadline?
If you miss the deadline for completing accounts year-end or filing your company tax return, you could face fines from HMRC. The amount of the fine will depend on how late you are and how serious the offence is.
Generally speaking, the fines will follow these guidelines:
- 1 – 3 months late – £375
- 3 to 6 months late – £750
- Over 6 months late – £1,500
What if you Know You’re Going to be Late?
If you know that you’re going to be late in completing your accounts year-end or filing your company tax return, it’s important to let HMRC know as soon as possible. This will help to avoid any potential fines. If you are going to be late because you don’t know what to do, HMRC can also help you by providing guidance on what you need to do.
Reporting VAT Returns
If your company is registered for VAT, you will need to file a VAT return with HMRC every quarter. The deadline for filing your VAT return is usually one month after the end of the quarter. So, if your company’s financial year-end is 30th June, you would need to file your VAT return by 31st October (for the period from July – September), by 28th January (for the period from October – December), by 31st April (for the period from January – March) and by 31st July (for the period from April – June).
Filing Your Confirmation Statement
A Confirmation Statement is a document that confirms your company’s details are up-to-date. It must be filed with Companies House every 12 months. The deadline for filing your Confirmation Statement is usually 14 days after the anniversary of your company’s incorporation. So, if your company was incorporated on 30th June 2021, you would need to file your Confirmation Statement by 14th July 2022.
If any of your company’s details have changed since you filed your last Confirmation Statement, you must update them in the statement. You can do this by submitting a Change of Details Form to Companies House.
What Change of Details do you Need to Report?
The following are some examples of changes that you would need to report:
- Change of registered address
- Change of director(s)
- Change of company name
- Change of company type
- Transfer of shares
- New shareholders
These details need to be updated because they appear on the public register at Companies House. If your company is dissolved, you must also inform Companies House by filing a Final Confirmation Statement.
What Happens if You Don’t File Your Confirmation Statement?
If you don’t file your Confirmation Statement, you could face a fine of up to £500. You may also be struck off the register at Companies House, which means your company will no longer exist.
To avoid this, it’s important to make sure that you file your Confirmation Statement on time. If you’re not sure how to do it, you can speak to an advisor directly at Companies House for guidance.
Who Can Help With Your Year-End Accounts?
There are a few different professionals who can help you with your year-end accounts:
An accountant can help you to prepare your accounts and file them with HMRC. They can also help you to file your company tax return and pay any corporation tax that is due. Some limited companies have an in-house accountant who takes care of these tasks while others only hire one when they need to.
A Tax Lawyer
A tax lawyer can help you to understand the tax implications of your business and advise you on how to minimise your tax liability. They can also help you with any disputes that you may have with HMRC. Tax lawyers are usually used by larger businesses or those with complex tax affairs.
A Financial Advisor
A financial advisor can help you to understand your business finances and make decisions about how to grow your business. They can also help you to set up financial systems and processes, such as budgeting and forecasting. Financial advisors are used by both smaller companies and larger businesses with complex financial affairs.
As well as these professionals, you can also get help from:
HMRC can provide guidance on completing your company accounts and filing your tax return. They can also offer help and support if you have any queries or problems. If you know that you are going to be late with your accounts, you should contact HMRC to let them know and they may be able to give you more time.
Companies House can provide guidance on filing your Confirmation Statement and annual accounts. They can also help if you need to update any of your company’s details on the public register. Make sure you contact Companies House if you know that you are going to be late with your filings.
As you can see, there are a few different professionals who can help you with your year-end accounts. Each one has their own area of expertise, so it’s important to choose the right one for your needs. If you’re not sure where to start, HMRC and Companies House can both provide guidance.
Top Tip for Completing Year-End Accounts
One of the most important things to remember when completing your year-end accounts is to start early. This will give you enough time to gather all of the information that you need and make sure that everything is filed correctly.
Keep Your Paperwork in Order
Another top tip is to keep your paperwork in order. This will make it easier for you to find what you need when you’re preparing your accounts. You may also need it for evidence if HMRC claims you’ve made a mistake.
Chase Payments Owed to You
If you’re owed money by customers or clients, make sure you chase it up. This will help to improve your cash flow and reduce the amount of debt that you have. All of this looks good on your accounts and can help to improve your business’s financial position.
Claim Your Expenses
Make sure you claim all of the expenses that you are entitled to. This will help to reduce the amount of tax that you have to pay. There are various expenses that can be claimed against your final tax bill depending on the nature of your business but these may include:
- Travel expenses
- Staff costs
- Premises costs
- Equipment costs
Double-Check Your Financial Records
Once you have everything in order, it’s important to double-check your financial records. This will help to ensure that everything is correct and up to date. It’s also a good idea to get someone else to check them for you such as an accountant or financial advisor.
Organise Your Employee Records
If you have employees, you will need to organise their records. This includes things like payroll information and employee contracts and will help you to track their hours worked and ensure that you are paying them the correct wages. It may also be necessary to provide this information to HMRC which is important as it can help to ensure that you are complying with employment law.
Backup Your Data
Make sure you backup your data to avoid losing any important information. This is especially important if you are self-employed as you may not have anyone else who can access your records.
Completing accounts year-end in the UK is a complex process, but it’s important to make sure that you do it on time to avoid any potential fines. By following the steps outlined in this guide, you can ensure that your company’s accounts are up-to-date and compliant with all the relevant legislation.
If you have any questions or need help with your year-end accounts, don’t hesitate to get in touch with a professional or with HMRC or Companies House directly. They will be able to guide you through the process and help you to complete everything on time.