What your year end accounts actually are
Statutory accounts are a formal record of how your company performed over its financial year and what it owned and owed on the last day of that year. They include a profit and loss account, a balance sheet and notes, laid out in a format set by company law. A version is placed on the public register at Companies House, so anyone can look up your company and see it.
The same figures feed into your company tax return, known as the CT600. HMRC wants the full accounts, tagged in a digital format called iXBRL, sent alongside the return. So one set of well kept records ends up serving two different government bodies with two different deadlines.
Most of the small companies we see in Fulham, Parsons Green and Hammersmith qualify as micro entities or small companies. That means simpler accounts and fewer disclosures on the public record. We check which category you fall into each year rather than assuming, because a growing company can move up a band without noticing.
Deadlines every director should know
The dates are worked out from your accounting reference date, which is the last day of your company financial year. Miss them and penalties follow automatically.
Your very first set of accounts has a different deadline. It is usually 21 months from the date the company was incorporated, which catches a lot of new directors out because the first period can be longer than 12 months.
- Accounts filed at Companies House: 9 months after the year end
- Corporation tax paid to HMRC: 9 months and 1 day after the year end
- CT600 company tax return filed: 12 months after the year end
- Confirmation statement: at least once every 12 months, separate from the accounts
What is included
- Year end statutory accounts in the correct format
- Corporation tax computation and CT600 return
- iXBRL tagging and electronic filing with HMRC
- Filing with Companies House
- Confirmation statement filing
- Director's loan account review
- Capital allowances claims on equipment and vehicles
- A plain English review of your results
How we work with you through the year end
Shortly after your year end we send a short checklist. You share access to your bookkeeping software or send your bank statements, sales invoices and receipts. If your books are already kept in Xero, QuickBooks or FreeAgent the job is much quicker, and we can work from what is there.
We then review the figures, ask questions about anything unclear and prepare draft accounts. You get a plain English summary covering profit, the corporation tax due and the balance on your director's loan account. Nothing is filed until you have read the accounts and approved them.
Once approved, we file the accounts with Companies House and the CT600 with HMRC, and tell you exactly how much tax to pay and by which date. Many directors around Fulham Broadway and Sands End like to meet in person for the review. Others prefer a video meeting. Both work fine.
Common mistakes we put right
A lot of our new clients come to us after a difficult year with a previous adviser, or after trying to do the accounts themselves. The same problems turn up again and again.
- Paying dividends when the company did not have enough retained profit to cover them
- An overdrawn director's loan account that triggers an extra tax charge on the company
- Personal spending running through the business bank account without being recorded
- Equipment bought for the business treated as a day to day expense instead of being claimed through capital allowances
- Confusing the Companies House deadline with the HMRC deadline and filing one of them late
Dividends, salary and your director's loan account
Most owner managed companies pay the director a mix of salary and dividends. Getting that balance right matters, but so does the paperwork behind it. Each dividend should have a board minute and a dividend voucher, and the company must have enough profit after tax to pay it. If it does not, the payment may be treated as an illegal dividend that has to be paid back.
Your director's loan account tracks money moving between you and the company that is not salary or dividend. If you owe the company money at the year end and it is not repaid within 9 months, the company faces a temporary tax charge on the balance. We flag this well before the deadline so you have time to sort it out, usually by declaring a dividend or repaying the loan.
What to have ready
You do not need perfect paperwork to get started, but the more of this you can gather, the quicker and cleaner the job will be.
- Bank statements for every company account, including savings and credit cards
- Access to your bookkeeping software, or sales and purchase records
- Details of any assets bought or sold, such as vans, laptops or machinery
- Loan agreements and finance documents
- Payroll reports and records of any dividends paid
- Last year's accounts and tax return if you are switching from another accountant
Who this suits
- Directors of new companies facing their first set of accounts
- Owner managed businesses in Fulham and Chelsea paying themselves through dividends
- Contractors working through their own company
- Dormant companies that still need to file each year
- Companies switching from an accountant who has stopped responding
Common questions
Do I need to file accounts if my company did not trade?
Yes. A dormant company still has to file accounts with Companies House every year and a confirmation statement. HMRC may also need to be told the company is dormant so it does not expect a tax return. We can handle dormant filings for you.
Can I do my own limited company accounts?
You can, and some directors with very simple companies do. The tricky parts are the formatting rules, iXBRL tagging for HMRC and getting dividends and the director's loan account right. Mistakes tend to show up later as penalties or tax charges, which is why most directors hand the work to a qualified accountant.
What happens if I file my company accounts late?
Companies House charges an automatic late filing penalty that rises the later the accounts are, and it doubles if you are late two years running. HMRC charges separate penalties for a late CT600. Not filing at all is a criminal offence, and Companies House can take steps to strike the company off the register.
How long do you need to prepare my accounts?
It depends on the state of your records. If your bookkeeping is up to date in cloud software, accounts can often be prepared within a few weeks of receiving everything. If the records need work first, we will tell you upfront how long that will take.
What is the difference between management accounts and statutory accounts?
Statutory accounts are the annual legal filing. Management accounts are internal reports, often monthly or quarterly, that help you run the business. They are optional, but useful if you want to see how you are doing before the year end.
Can I change my company year end?
Yes, you can shorten or extend your accounting reference date by filing a form with Companies House, within limits. Extending is usually only allowed once every five years. We can tell you whether a change makes sense before you make it.
How much will my accounts cost?
Fees depend on the size of the company and the state of the records. We review what you have for free first, then agree a fixed fee before any work starts, so there are no surprises later.