What is your company yearend and what do you need to know?

Published On: 12/03/2023

When you own a Limited Company you must complete a yearend, but what is it, what information does it need to include, and why do you need to do it? Our blog answers all these questions and more, to ensure you’re confident with your yearend.

What is a yearend?

In a nutshell, it’s the date which your company’s accounting period officially ends. This is also the date which Companies House and HMRC expect you to return all required documents back to them.

If this is your first yearend it’s best to run it past your expert accountant, who will be able to guide you and help you get it right first time.

What are the deadlines for your company’s accounts and tax returns?

Once your Limited Company’s financial year has ended (also known as your yearend or accounting period), you must prepare and file:

  • Your company tax return
  • A full ‘statutory’ annual accounts

Every Limited Company’s accounts and tax return must meet the following deadlines, which are set out by HMRC and Companies House:

HMRC’s dates and requirements

  • You must pay your Corporation Tax, or let HMRC know that your company doesn’t owe any – 9 months and 1 day after your accounting period for Corporation Tax ends
  • File a Company Tax Return – 12 months after your accounting period for Corporation Tax ends

Your accounting period for Corporation Tax is the period of time covered by your Company Tax Return. This is usually the same 12 months as the company financial year, which is covered by your annual accounts.

Companies House dates and requirements

  • Filing your company’s first accounts with Companies House – 21 months after the date your company was registered with Companies House
  • File annual accounts and subsequent years annual accounts with Companies House – 9 months after your company’s financial year ends

What you must file with HMRC

Your Company’s Tax Return

Your Company Tax Return, or CT600 must include details of your company’s income, less tax allowances and expenses. The remaining amount (your profit) is then used to calculate how much Corporation Tax your company is due to pay.

Annual Accounts or Statutory Accounts

The Annual Accounts you must submit to HMRC consist of the following:

Income Statement – Displays the profit or loss during that accounting period for your company.

Statement of Financial Position – Gives a picture of your company’s accounting period end date, displaying the cumulative values of your business based on its assets, capital, liabilities and reserves.

Footnotes – shows transactions between your company and its directors, such as guarantees, advances and loans.

What you need to file with Companies House

If you use the FRS 105 to prepare your annual accounts (using the financial reporting standard for micro-entities) – you need to submit two documents from your Annual Accounts to Companies House. The first is the Statement of Financial Position, and the second is the footnotes. Once these two documents have been submitted to Companies House, they will be published on their website, and therefore anyone can access and view them.

What do you need to prepare for your company’s yearend?

You’ll need to complete the following before preparing your Annual Accounts and Company Tax Return:

  1. Manage your expenses – every pound you’re legitimately able to claim as a business expenses is another pound off of your company’s profits, and therefore less profit means less Corporation Tax to pay
  2. Chase late invoices – your money should be in your business account, and not your clients, so ensure you chase all outstanding invoices before your company’s yearend. Once the money is in your account you can reconcile your accounts, and ensure they’re 100% correct
  3. Get all paperwork together – your accounts need evidence to back them up, which is usually in the form of records and receipts. You’ll need records for everything before you file your company’s yearend, including statements of account from suppliers, bank statements, and income records. You’ll need to keep all records for a minimum of six years from the end of your company’s accounting period
  4. What are the deadlines – your tax return’s deadline is 12 months post the end of the accounting period which it covers, and should you miss the deadline you’ll be required to pay a penalty. There’s also a separate deadline for paying your Corporation Tax bill, which is 9 months and one day post the end of your company’s accounting period

Companies House requires your company’s annual accounts within 9 months of your yearend, and within 21 months of your company’s registration date, but only if it’s your first return.

What happens if you miss the deadlines?

There’s an associated fine with missing the deadlines, and the longer you leave it, the greater the fine will be. Should you miss more than one deadline, you can expect the following fines:

Late by 1 day – £100 fine

Late by 3 months – Another £100

Late by 6 months – HMRC will estimate your Corporation Tax bill, and add a 10% penalty of the unpaid tax

Late by 12 months – an additional 10% will be added to your overall unpaid tax bill

If your return is late three times in a row, your fines will increase to £500 each.

Companies House – late filing penalties

Late by a month – £150

Late 1 to 3 months – £375

Late 3 to 6 months – £750

Late 6+ months – £1,500

Late filing two consecutive years – your penalties will double

If you don’t send your accounts and / or Confirmation Statement when it’s due, you’ll be fined and your company may be struck off the Companies House register.

What else do you need to consider?

VAT Returns – The majority of Limited Companies file quarterly VAT returns to HMRC, and pay quarterly. There’s different schemes such as ‘yearly’, but they’re mostly quarterly for VAT. VAT quarters depend on the quarters given by HMRC (these are either Jan/Apr/July/Oct, Feb/May/Aug/Nov or Mar/June/Sept/Dec). VAT must be paid 1 month and 7 days after the end of your VAT quarter and therefore it is to be submitted and paid to HMRC (if a liability is due) four times every year.

Confirmation Statement – If you’re a Limited Company director you’ll need to register your company’s information once a year with Companies House. If you don’t you’ll be subject to fines personally in criminal courts, and your company could be struck off the register. Your Confirmation Statement needs to be filed once a year, and within 14 days of its due date (which usually is a year after your company’s incorporation date, or the date of your last Confirmation Statement). You’re required to do this, even if your company is dormant.

Financial planning – More money in your pocket doesn’t happen by chance, and usually requires effective financial planning from an expert accountant. Financial and tax planning can reduce your overall tax bill and help plan financially for your future. Whether it’s paying into a pension or ISA for example, or maybe even using your spouse’s allowances, these options can make a huge difference to your overall financial health and future.

Taxevo – here no matter what to help you achieve your goals

Tax, accounting, planning for the future – if you don’t know them like the back of your hand it’s easy to miss important information and ways in which to ensure your money is working as hard as it possibly can for you. Here at Taxevo our team of expert accountants are on hand to help you, no matter what the subject. If this sounds like the type of expert advice and support you need to make your money a success, get in touch.

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