Every business organisation or limited company in UK must file their annual year end accounts, also known as the ‘Statutory Accounts’, before the year comes to an end. It is that time of when business owners and directors need to dive into their accounts and ensure that everything is correct at its place. A little effort on year end account management can help you pass through the accounting and taxation process with an ease.
Limelight Accountancy brings you a must-have year end accounts checklist for business companies, that’ll help you preparing and getting your accounts in place.
Claim all your business expenses
It must be noted that all your expenses must be claimed before your year-end, as every expense you claim as tax-deductible expense is vital for you. Less profit will also fetch less Corporation tax. However, the expenses must be exclusive only for business use, and nothing else.
Employee Bonus Payments
If you’re planning to reward your employee in the form of bonuses, it must be done before the year end. Bonuses are treated as regular pay when it comes to calculating income tax. The cost of bonuses or payments towards employer’s national insurance cost will be included within the current financial year and will further lower Corporation Tax.
Protect High Cash Balance
Capital investment is one of the most important fuels for running any business organisation. It is always suggested to keep your cash balance high by the year end so that it may reflect in your balance sheet. It will further help you in maintaining a good score with credit agencies. It is good to become a debt collector and ask all your clients/vendors to clear unpaid invoices.
Review Profit & Loss Statement
You need to find out all your revenue-generating items and all your tax-deductible business expenses. The best way to track these is by reviewing your profit & loss (P&L) income statement.
Process Employee Expenses/Imbursements
As a business owner, you should ensure that all your employee’s expenses and other imbursements and processed before filing the year end accounts.
You need to review each and every business liability before the year end. Review VAT control accounts, wages, pensions, allowances, payee, deferred income, prepayments and accruals before submitting your year-end accounts. A small mistake or mismatch can cause a lot of troubles on a later stage.
Estimate Potential Corporation Tax Liability
Most of the business companies fail to estimate their corporation tax liability, and at the end they fail to pay the taxes on time. Therefore, it is always advisable to estimate your potential tax liability and keep the money aside in your bank account so that you have enough time and money to pay your tax bills without any delay.
Request Tax Payment Extension
It is advisable to think whether you’ll need a tax payment extension or not. If yes, then HMRC will help you. Check out their official website for more information on how to apply for tax payment extension.
Keep Documents & File Receipts
This is a basic knowledge you must possess as a business owner. You must maintain and safely keep all your business transaction records, documents and file receipts as they’ll help to track all your business expenses.
Contact Accounting, Bookkeeping or Financial Advisor
Lastly, it is always advisable to contact a reliable accounting firm to handle all your businesses’ year end accounts and taxation filing in a professional way. We at Limelight Accountancy will take care of all your crucial accounting tasks in the best way so that you can focus on your business at the busy time of the year end. Contact us at 01428 644433 to know how we’ll help you.