• Jane Wu LLB ACA

Year End Checklist ✔

Good monthly processes and some up front preparation are the formula for successful accounts and tax


Is your business year end coming up? Get prepared now with this handy checklist.


Dates and deadlines


Firstly, check you know when your key dates and deadlines are.

  • If you are a company, the accounting year end is the date shown on the Companies House register. Unless it has been changed, this should fall every year at the end of the month in which the company was first registered.

  • Company accounts are due to be filed at Companies House 9 months after the company year end (with the exception of your first accounts which are due 21 months after the date of first registration)

  • A company tax return is due for filing with HMRC 12 months after the end of the accounting period, BUT

  • The deadline for paying company corporation tax (or informing HMRC that none is due) is 9 months and 1 day after the company year end

  • If you are an unincorporated business there is no requirement to file accounts, although to prepare a self assessment tax return it will be necessary to calculate the profit for your 'basis period'. Self assessment tax returns are due by 31st January following the end of the tax year (5th April).


Before year end:


  • Make sure all your business expenses are booked. Chase up invoices and receipts and make sure they are all entered. Business expenses reduce the profit and therefore the tax so you dont want to miss any.

  • Chase up outstanding customer debt.

  • Gather your paperwork together. Make sure you have all the invoices, receipts, statements, agreements and contracts available to support your books.

  • Financial planning. The run up to year end is a good time to review your profits and consider tax planning e.g. investing, accelerating or deferring transactions and, if you are a company director, reviewing how you remunerate yourself for tax efficiency, potentially considering bonus payments or pension contributions as well as salary and dividends. You might also want to review the tax free benefits you can provide for your staff and take advantage of any unused allowances. Occasionally, you may wish to review your business structure or accounting date. Speak to your accountant in good time in order to put appropriate strategies in place.


At year end:

  • Count your stock. If your business holds stock, you need to have an accurate stock figure in your accounts. A stock take should be performed on or as close to the year end date as possible. Make a note of any missing, damaged or unsaleable items. Note the cost price of all items on your stocktake list.


After each month end (ideally!) and/or just after year end:


As far as possible, all account balances in your books should be tied back to third party source documents. Here are the key things you should do as part of your regular bookkeeping and will be needed to complete your year end accounts.


  • Reconcile the bank account. Check the balance on your statements from the bank as at your year end date matches or reconciles to your accounting records.

  • If you have any of these, they should also be reconciled to the third party statements:

  • Payment services (e.g. PayPal, Stripe, Sum-Up etc)

  • Credit cards

  • Savings accounts

  • Loans

  • Review your debtors and creditors. An aging report, if your software provides one, is really helpful as a sanity check as it will highlight items that are particularly old and may need attention. If you have statements from suppliers check your books reconcile to the statements. If you have particularly old debtors you should consider whether they really are recoverable or should be 'written off'. If in doubt, discuss with your accountant.

  • Reconcile the VAT balances to your VAT returns

  • Reconcile the payroll balances to your payroll reports

  • If you have received government grants or other support related to COVID19 make sure you have the paperwork to support what the business has received and reconciled these to your books

  • Review your other accounts to check transactions are booked consistently to the right place. Look for particularly large / unusual items and check they are booked correctly. Also review for duplicated bookings (some accounting software will have a report to help find these)


Summary


The list above can look daunting but if you maintain good bookkeeping practices throughout the year you will help you fly through. Good bookkeeping software can really help and the real-time information that they provide is crucial to successful tax planning.


#yearendplanning #taxplanning #taxtips #companyaccounts #janesaccounting


The information contained within in this article is provided for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice specific to your own circumstances from your own adviser.

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