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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.


Is There a Deadline for Financial Reporting?

There are a number of deadlines you need to be aware of when submitting the two documents to both authorities:

There is a shorter deadline for paying corporation tax than there is for filing your Company Tax Return, meaning your company may end up submitting its tax return after paying tax for it. This shouldn’t be too much of an issue though, as your accountant will be able to estimate how much tax is due, and overpayments can be dealt with later. Nonetheless, submitting your tax return as early as possible rather than waiting for the deadline is the best practice to ensure you pay the correct amount of tax.


Should you miss a deadline for reporting or paying tax, you’ll receive an automatic penalty which you’ll have to pay to the relevant authorities (HMRC and Companies House). Try to avoid late filing as you could be taken off the register, and even if this does not happen, you will still have to pay a fine depending on how late they are:

What Are My Other Reporting Duties?


There are some reporting that are convenient to do at the same time as your year-end reporting, although it technically isn’t part of your year-end reporting. These include your VAT returns which are usually also due at the end of your company’s financial year and your Confirmation Statement whereby you are required by law to confirm your company information with Companies House on a yearly basis. Your statement must be filed 14 days before the due date:  a year after either your incorporation date or the date of the previous statement. You must submit this even for a dormant company, and failure to do so (for any company, dormant or active) may be considered a criminal offence.graph

What Do I Need to Do to Facilitate My Year-End Reporting?


Be sure to follow this handy checklist which will help make the year-end reporting process smoother for you:


  1. Preparation         - give yourself at least a month in advance to prep;  put your staff on a ‘year-end footing’ so they dedicate more time, effort and focus to chase orders and invoices, reduce expenditure, file expenses and ensure they have all relevant documents to hand.
  2. Paperwork - gather all your paper and online documents (income records, bank statements, statements of account from suppliers, invoices, and receipts) so you can access them quickly and easily in case your financial reporting is challenged.
  3. Overdue payments - chase up unpaid invoices well before the deadline of the reporting and bank as many payments as you can, to ensure accurate accounts and avoid paying tax on money you don’t have yet.
  4. Expenses - keep track of all of your expenses as expenses reduce your profits, meaning you pay less corporation tax. You can claim anything the company has bought ‘wholly and exclusively’ for business use as an expense on your Company Tax Return.
  5. Accounts vs records - cross-check the figures in your accounts and tax return against the figures in your supporting documents eg bank statements, invoices etc. Ensure unpaid sales made are listed as outstanding debts owed instead of revenue and note any invoices where there is a risk of no payment.
  6. Employee data - make sure all information on your staff is up to date (payroll, benefits and expenses), as you’ll be liable for mistakes relating to tax or National Insurance. Insist that employees provide the correct receipts if they are claiming expenses.
  7. Backups - make and organise regular backups of your accounts and tax returns in progress, so if you lose any data, you can pick up from where you left off.


Hire an accountant - an experienced accountant or accountancy firm can ensure your year-end reporting process is smooth and accurate. An accountant you can connect to on a personal level would be particularly useful in leaning on them should you need to be relieved from the stress that year-end reporting brings.


At Kubed Solutions, we can assist you with your year-end accounting as well as any other accounting needs, and we can also act as a confidante and mentor during times of tension caused by financial reporting or any other business-related worries you may have. Be sure to get in contact with us today for a free 30-minute consultation by calling 07762657277.