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What is Year-End Reporting? Financial year-end reporting is the legal process in which limited companies must send certain information to HMRC and Companies House. This must be done by the end of the company's personal financial year, ie the day before the start day or ‘birthday’ - not the end of the tax year (5 April). A company’s start day may be, for example, the date specified when you registered with Companies House, or the date the company started trading. Year-end reporting must be done so that the company pays the correct amount of tax, and provides the public, shareholders, banks and potential investors with the correct information about the company. Financial year-end reporting is usually done by an accountant or accountancy firm (such as us here at Kubed Solutions), for the entire financial year - which is usually the same as your corporation tax accounting period. What Information Do I Need to Report? There are two key documents you need to send for reporting your accounting period. Your Company Tax Return must be sent to HMRC so they can calculate how much corporation tax you owe. Also known as form CT600, this document presents the company’s turnover, expenses, tax allowances and profit, in the form of the company’s Statutory Accounts. Your Statutory Accounts must be sent to Company House. Also known as your Annual Accounts, this document details and summarises the company's financial activity within that year, primarily for the benefit of HMRC and the company's shareholders. Statutory accounts describe overall expenses and income as opposed to individual transactions, and are made up of the following: Income Statement: aka a ‘profit and loss account’; shows the company’s sales, running costs and the profit or loss it has made over the financial year; Statement of Finacial Position*: aka a ‘balance sheet’, shows the overall value of everything the company owns, owes and is owed (ie business's assets and liabilities, and the total difference between them) on the last day of the financial year; Director’s report: a report on the state of the company by the board of directors; not required if you’re a ‘micro-entity’; and Footnotes about the accounts*: additional information to clarify the other sections. *published by Companies House for general viewing. Producing your statutory accounts can help you understand your day-to-day operational costs and all the other essential aspects of your business's finances, which may be useful for you as a business owner.
What is the Difference Between a Capital Expenditure and a Revenue Expenditure? Knowing the difference between capital expenditure and revenue expenditure is crucial when filing your tax return and claiming for business expenses and super deductions. Capital expenditure is the use of funds to acquire, maintain or upgrade physical fixed assets. This type of expenditure is made to leverage growth and financial stability within a business. Contrastingly, revenue expenditure is a cost charged to expenses related to specific revenue transactions or operating periods for running the day-to-day business and the maintenance costs needed to keep assets in working order. The matching principle is used to link the expense incurred to revenues generated in the same operating period, thereby yielding the most accurate income statement results. Capital and revenue expenditures vary in the timing of when they are charged, assumed consumption period and monetary size.
You may decide to use a car for business for a variety of purposes, including business trips, visiting clients, work events and aiding operations relating to the business. If you believe your business could benefit from the usage of a car but are unsure about getting one as well as the type of car to get, we're here to break down buying vs leasing a car for your business, using a pool vs company car, whether or not to consider using an electric car, the tax advantages and disadvantages of all these options. Can I Use a Personal Car for Business? If you buy a car only for personal use, you won't be able to claim any expenses for tax relief. If you use your personal car for work purposes other than for commuting to and from work, you can claim this as a business expense for your own business or a claim from your employer. One method of calculating such vehicle expenses is using a fixed mileage rate set by HMRC, whereby you can reclaim: 45p per mile if you've travelled less than 10,000 business miles per tax year, and 25p per mile business miles over 10,000. this applies to cars and vans only - motorcycles and bikes have different mileage rates. Your employer can then claim these reimbursement costs as an expense and claim corporation tax relief. Any costs reimbursed above the mileage allowance will count as income and will be subject to tax and National Insurance, and will be taxed at your personal income tax rate; this is also applicable to company directors. Click here to read our blog post on a more in-depth guide to methods for claiming motor expenses. Buying a Non-Electric Car for Business If you don't want to use your personal car for business purposes, you can buy a pool or company car to use instead. A pool car can be used by all employees exclusively for business usage while a company car is only available to individual employees for private as well as business usage. It is vital to know the difference between the two types of cars as each has different tax implications. If you buy a pool car for your limited company, you can reclaim the VAT and claim capital allowances, aka tax relief related to long-term business assets. You can do this via a writing-down allowance, whereby you depreciate a percentage of the car's value every year. According to HMR, the CO₂ emissions will determine the percentage that is deducted:
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