Year End Guide for Limited Companies
A company’s year end brings certain obligations to carry out for limited company directors. We have set out below some key responsibilities and deadline dates by when tasks are required to be completed.
Firstly, the year end date is the date to which the company will prepare its accounts.
Before preparing the company’s Annual Accounts, there a few bits of administration you will need to complete.
Ensure you accurately record your business expenses
All business expenses should be recorded and will directly impact on the company’s final corporation tax charge.
HMRC’s guidelines state that expenses must be “wholly and exclusively” for business use, so if you bought something specifically for your business, you should be able to claim it as a business expense. Please contact your accountant if you are unsure of what you can and can’t claim.
What year end documents do I need to prepare?
Exactly what you need to prepare depends on your business. An adequate book-keeping system should be used to record the business’s transactions; ideally an online accounting software which your accountant can also access. However, the following should be sufficient for the majority of small businesses:
- Company bank and credit card statements
- Record of income
- Record of business expenditure
Company Tax Return
Your Company Tax Return (CT600) will be submitted to HMRC together with the annual accounts and contains details of your company’s taxation.
Your company’s Annual Accounts will summarise the company’s performance over the accounting period
HMRC / Companies House submissions
HMRC requires your Company Tax Return and full Company Accounts.
Deadline: 12 months after the end of the accounting period. If Corporation Tax is due, this is required to be paid to HMRC within nine months and one day after the accounting period.
Companies House only requires an abbreviated set of Annual Accounts (these will be made public on the Companies House website).
Deadline: Nine months after your year end (within 21 months of your registration date if it’s your first return).
Late filing penalties
The following penalties will be charged to the company if you miss the deadlines.
Late filing penalties issued by HMRC
1 day £100
3 months £100
6 months HMRC will estimate your Corporation Tax bill and add a penalty of 10% the unpaid tax
12 months Another 10% of any unpaid tax
If your tax return is late three times in a row, the £100 penalties are increased to £500 each.
Late filing penalties issued by Companies House
Up to a month late £150
1 to 3 months late £375
3 to 6 months late £750
Over 6 months late £1,500
If you file late two years in a row Penalties double
Aside from meeting your obligations with HMRC and Companies House, your year end is also a good time to review your company’s performance and plan for the future.
If your company is VAT registered, you may have a VAT return due for submission at the same time.
Confirmation Statement (previously known as the Annual Return)
As a director of a limited company, you are required to submit a Conformation Statement with Companies House once a year. The Confirmation Statement includes official company information such as the registered office address, company’s’ officers, business description and shareholdings.
Failure to file a Confirmation Statement can result in directors being fined personally in criminal courts, and companies being struck off the register.
You need to file your Confirmation Statement at least once a year, and within 14 days of its due date. The due date is normally a year after your incorporation or the date you last completed a Confirmation Statement. You must submit a Confirmation Statement even if the company is dormant.