Your Year End Accounting Checklist, Sorted

The worst part about starting, or owning, a business is dealing with your accounts. But if you own a limited company, they’re something you need to get used to pretty quickly.

If any of your accounts are late, or inaccurate, there are big fines to face. And yet, no matter how many times businesses are warned, thousands fail to deliver. In fact, it was reported that businesses in London and Birmingham have been some of the top offenders for filing late, with over 200,000 UK companies facing hefty fines for missing the Companies House deadline in 2019.

Your year end accounts are a pretty big one to get under control. Whether you choose to do it alone, or work with a trusted accountant, we’ve put everything you’ll need into this handy year end accounting checklist. 

Let’s get down to business, shall we?

What are end of year accounts?

Year end accounts can also be referred to as financial accounts, annual accounts, statutory accounts or company accounts. It will normally include information such as: 

  • Directors report. This is a document written by the company directors, summarising the business’ performance over the year with their views of its current position and how they think it will perform in the future. This is not required for micro-entity accounts. 
  • Balance sheet. This gives details of the company’s assets and liabilities at the end of the accounting period.
  • Profit & Loss account. This gives a summary of income and expenses and gives the total amount of profit or loss over the period.
  • Explanatory notes. This is a commentary and explanation on the details of the profit and loss account and balance sheet.
  • An auditors report. This is a report carried out by an external auditor or accounting, providing an evaluation of your accounts and that there is ‘truth and fairness’ in the documents that you submitted. This report isn’t needed if your company is exempt from auditing. 

If you have a limited company, you must legally file your end-of-year accounts with both HMRC and Companies House. 

If you’re not happy with having that as a requirement of a limited company, you can opt to register as a sole trader instead. As a sole trader, you’ll have fewer legal obligations and won’t have to complete end-of-year accounts. You will, however, have to submit a self-assessment tax return. 

Not sure what’s the right choice for you? Take a look at our guide highlighting the pros and cons of being a sole trader vs a limited company.

Lost the buzz for your business?

Starting a business is exciting. Succeeding is rewarding. The bit between is hard, repetitive, and full of self-doubt. 

The Lonely Middle Club (From Business4Beginners) helps you through it:

Get support and advice from other small business owners

Remove the self-doubt that’s holding your business back

Learn techniques and strategies to grow your business faster

Be inspired with our exclusive ‘swipe’ file and AI-powered tools

No pressure – work at YOUR pace, towards YOUR goals

Your year end accounting checklist 

Ready to tackle this task? Let’s get started with your year end accounting checklist. 

1. Get your financial statements 

First up, you need to take a look at your current financial information. This means collecting your financial statements, including your:

  • Income, or profit and loss statement. This summarises your revenue and expenses and lists all of the money you’ve gained and spent throughout the year. It will include expenses such as tax, operating expenses, depreciation, revenue and the cost of goods sold. 
  • Cash flow statement. This shows the business’s ingoing and outgoing cash, excluding your credit. This statement focuses exclusively on your cash flow, which may highlight if you are spending more than you’re bringing in. 
  • Balance sheet. This shows your assets, liabilities, and equity and tracks your company’s financial progress. Your liabilities and equality should always be the same amount as your assets, so if they don’t add up, you’ll need to rebalance your books. 

If you use bookkeeping software, this step should be a breeze for you to complete. 

These statements are also essential for checking over your performance and forecasting your financial future. 

Main Newsletter - General Opt-in

Enjoying this article?

Get the latest small business advice in your inbox

Get more articles like this when you join our exclusive email newsletter packed with regular updates & business-boosting tips.

You can unsubscribe at any time. See our Privacy Policy.

2. Collect due invoices 

Your year end accounts act as a reflection of your business’s financial performance over the past year. In order to wrap the year up properly, you should try and collect all outstanding invoices to square all of your accounts. 

If you’re having trouble collecting overdue invoices, you may want to contact the client to work out an alternative payment plan or enlist the help of debt collection agencies. However, bringing in a 3rd party will mean that a portion of this invoice will go to them.

3. Sort your paperwork 

All of your records, receipts and documentation need to be properly stored and backed up. Before you submit your year end accounts, spend time making sure that every receipt is recorded and in the right place. 

This can be an incredibly difficult and time-consuming task if you’re doing everything by hand and on paper. To speed up this process, you may want to invest in bookkeeping software to help store all of these records for you.

Recommended – Top-Rated Online Accountant:

The Accountancy Partnership Reviews

Overall Rating:

9.4

Read Full Review

Low fixed monthly fee

No minimum terms

Unlimited advice

Top-Rated Accounting Software:

Accounting SoftwareCheapest PackageEase Of UseOur RatingReviewOfficial Site
FreeAgent reviews£19/moExcellent
9.4
Read ReviewVisit Website
ANNA ReviewFREEOutstanding
9.3
Read ReviewVisit Website
Quickbooks Reviews£12/moExcellent
9.3
Read ReviewVisit Website

View All

4. See if you have any unused expenses 

A big benefit of being a limited company is that there is a wealth of allowable expenses that you can claim for, provided that they are ‘wholly and exclusively’ for business use. This can be anything from Travel costs, equipment costs, pension contributions, clothing, eye tests and more. To make sure that you’re not missing out, check out our list of 25 allowable expenses that you can claim as a limited company. 

Each expense that you declare will help bring down your Corporation Tax bill. So it’s important that you remember to add all your expenses before doing your accounts.  

5. Check your employee data is up-to-date

If you have employees, you will also need to make sure that your payroll and employee benefits are correct and up to date. In addition, you need to ensure that any employee expenses have the right receipts and information attached to them. This is incredibly important because if an employee claims costs and fails to give the right receipts, you could be liable for tax or NI errors.

6. Make backups

You should really be doing this one as you are going, but if you haven’t already – back all your data up. There will be nothing worse than going through all this stress and bother if you end up losing all your progress. 

Backup, backup and backup again.

7. Put together your statutory accounts

Now you’ve got all the paperwork and finances right in front of you, it’s time to put them all together and produce the statutory accounts that you need to submit for Companies House. 

First, you need your income statement (also known as a profit and loss statement). This is a single page that summarises all your income and expenses over the year. For example, your income statement could look like this: 

Income Statement 

Your Company Name

For the year ended 31st March 20223

Turnover 

Sales: 

Total turnover: 

Cost of sales

Purchases:

Labour:

Total Cost of Sales:

Gross profit: 

Administrative costs

Advertising & marketing:

Audit & accountancy fees:

General expenses:

Light, power & heating:

Printing & stationary:

Rent:

Telephone and internet:

Subscriptions:

Travel:

Total Administrative Costs: 

Operating profit: 

Profit on Ordinary Activities Before Taxation:

Profit after Taxation: 

You would just need to fill in the blanks and edit the document to fit your company. Depending on the accounting software that you use, you might find that you can automatically generate these reports. 

Next, you have to create your statement of financial position (formerly known as a balance sheet). This will go into a little more detail about your accounts, showing information such as your fixed and current assets, trade and other debtors, creditors and bank balances. For example, your statement of financial position could look like this:

Detailed statement of financial position

As of 31st March 2023 

Called up share capital not paid

Fixed assets

Tangible assets

Current assets 

Other debtors

Bank 

Prepayments and accrued income 

Creditors: amounts falling due within one year 

VAT

PAYE_NI

Pension contribution

Director Loans

Net Current Assets (liabilities) 

Total assets less current liabilities

Creditors: amounts falling due after more than one year

Provisions for liabilities

Accruals and Deferred income 

Net assets

Capital and reserves

Share capital

Retained profit brought forward

Current years profit and loss

Alongside this, you may also need to create notes to the accounts. This is basically where you need to supply any supplementary information to help understand the balances that you’ve reported. 

Next, you will need to supply a directors report. This will include information such as: 

  • The names of people who served as directors during the financial year 
  • Analysis of the company’s performance in its market
  • Summary of the company’s current financial position
  • Description of the company’s primary business activities, objectives, and strategy
  • Evaluation of the current state and future viability of the market in which the company operates
  • Summary of likely future prospects and developments
  • Identification of trends or factors expected to impact the company’s future performance, development, or financial position
  • Assessment of the company’s capacity for expansion and growth
  • Description of principal risks and uncertainties facing the business
  • Explanation of how the directors have evaluated the company’s prospects, risks, and uncertainties
  • Explanation of the management approach to addressing opportunities and challenges
  • Reporting of any significant financial events affecting the company post the balance sheet date
  • Notable changes to fixed assets owned by the company
  • Recommendations regarding dividend payments
  • Confirmation of compliance by the business and its directors with all necessary regulations, standards, and responsibilities.

If you class as a micro-entity, you do not need to supply a director’s report. 

Finally, you will need to submit an auditors report that states the responsibilities of the auditor and company directors, that the accounts were prepared properly in accordance with accountancy practices and that the statements give a true and fair view of the company’s assets, liabilities, and financial position. If your limited company classes are small or qualify for an audit exception, you do not need to include this with your year end accounts. 

8. Don’t forget your company tax return 

Thankfully, submitting your company tax return to HMRC is a lot less involved than your statutory accounts. Using the information you’ve already uncovered, you just need to fill out your tax return detailing your income, any tax allowances and expenses. 

Then the remaining profit will be used to work out how much Corporation Tax you owe. 

9. Submit and pay! 

Once everything is prepared and ready, all that’s left to do is submit and pay your Corporation Tax bill. And that’s it for another year – phew!

FREE Download:

Set clear goals for your business

Plan and manage your time more effectively

Brainstorm ideas and log inspirations

Stay motivated and encouraged

What do accountants need for year end?

If you don’t want to do your year end accounts by yourself, you can save time and effort by getting an accountant on board to take care of this process for you. 

To file your year-end, your accountant will need access to all of your financial records and information. So, do you remember everything mentioned in that list before? Yep, that’s what they’ll need.

But once they have this information, they’ll be able to connect the dots, spot any errors and organise all of your papers to ensure everything is in order and submitted correctly and on time. That saves you a lot of hassle and ensures you’ll never get fined for late submissions. 

The only thing your accountant can’t do is chase up your late invoices. After all, they’re not mafia ‘heavies’ armed with hammers to threaten and force your clients to pay up!

How much will an accountant charge to complete my year end return? 

An accountant can help you complete your year end return, as well as any other booking services that you might need. They’ll be there to take away the stress and worry of having to complete this yourself, but better still, they’ll be able to ensure that any report is 100% accurate and on time. 

But how much will this cost you? 

In our guide to the average accountancy costs for a limited company, we gave a rubbish answer that costs will vary. And that’s true. Generally speaking, the more you want your accountants to do, and the worst state your books are in, the more you’ll be paying for them. 

If you do a lot of bookkeeping by yourself and use good bookkeeping software, then your accountancy prices are going to be cheaper. 

On average, you can get packages that start at around £80-100 a month for accountants. This would include basic services such as: 

  • Completing your company’s year end accounts
  • Processing payroll for you and any other staff members
  • Submitting quarterly VAT returns (if you are VAT registered)
  • Managing any correspondence from Companies House
  • Corporation tax return
  • Advice on business structuring or company set up
  • Registering your business with HMRC
  • Access to apps

Considering that missing the deadline for your year end accounts can leave you with fines of over £100 alone, we’d say that accountants are worth every single penny. That’s not even to mention how much time you’ll spend not having to manually do these returns yourself.

EXCLUSIVE OFFERS – Save On Your Accountancy Costs

10% Off Accountancy Packages

The Accountancy Partnership

Read Full Review

10% Off Accounting Software

FreeAgent Reviews

Read Full Review

Can I submit abbreviated year end accounts? 

Yes, you can submit abbreviated year end accounts to Companies House if your business fulfils any two of the following criteria: 

  • You have less than 50 employees
  • Your turnover is less than £10.2 million
  • You have less than £5.1 million on your balance sheets

Abbreviated year end accounts are basically shorter documentation that’s designed to give a summary. For this, you just need to submit a balance sheet that’s signed by one name director. 

However, remember that you still need to send your full year end accounts to HMRC. And no matter what, keeping a detailed record of your financial information in your files for future years is always a good idea. 

For example, if you are ever investigated by HMRC, they will want access to your records from the past 4 years. If there’s evidence of intent to mislead or submit errors, the HMRC can go up to 6 years back. For serious fraud cases, up to 20 years of records can be investigated. 

If you’re ever unsure, ask an accountant who can provide the right documentation and information to the relevant party.

What are the deadlines for submitting year end accounts? 

Year end accounts for a limited company are submitted to both Companies House and HMRC, which means that you need to keep track of a number of different deadlines here. 

You need to submit all year end accounts within 9 months of the end of your company’s financial year. If this is your first year as a limited company, you have 21 months to submit your first reports – just bear in mind that you will need to include two tax return statements within this. 

You also need to pay your corporation tax to HMRC, or inform them that you have nothing to pay within 9 months and 1 day of your accounting period.

What happens if I miss the deadlines?

If you miss your deadline for your year end accounts, both the HMRC and Companies House can issue fines. The longer you leave it, the worse fines you’ll see. 

HMRC late filing penaltiesCompanies House late filing penalties
1 day£100Up to a month£150
3 monthsAnother £1001-3 months£375
6 monthsEstimated Corporation Tax bill amount and an additional penalty of 10% of the unpaid tax3-6 months£750
12 monthsAdditional 10% of any unpaid taxOver 6 months£1,500

If that’s not rough enough: 

  • The £100 HMRC late penalties are increased to £500 each when your return is late three consecutive times
  • If you file late two years consecutively, Companies House penalties double

If you never want to worry about missing a deadline, it’s always best to leave these matters to your accountant. They’ll be able to prepare and ensure that all your information is submitted on time and accurately, saving you a lot of time, stress and potential fines. 

Not got an accountant for your business yet? 

Take a look at our guide of 5 essential questions you need to ask your accountant to make sure that you find the right fit for your business. 

Where do I have to submit my year end accounts? 

Limited companies are required to submit their annual accounts to several entities, including both Companies House and HM Revenue & Customs (HMRC) as part of their Company Tax Return. 

In addition, they must share the report with the company’s shareholders or guarantors (referred to as ‘members’), every holder of the company’s debentures, and any individuals who are entitled to attend general meetings. 

Can software help me submit my year end accounts? 

Absolutely. 

Accounting and bookkeeping software can be an incredible time-saving feature for businesses all year round, not just when it comes to your year end. This software is a good place to store and calculate all of your expenses, keep track of your financial records and provide a secure digital copy of your records. 

No matter how experienced, or inexperienced you are, there are plenty of software options for you to choose from. 

Find one that will be the right match for you by taking a look at our reviews of the best accounting software for UK businesses. 

Which Accounting Software Is Right For You?

Answer 5 multiple choice questions to get a personal recommendation:

Find An Accounting Software Quiz

OPTIONAL: Claim your free Bookkeeping for Beginners guide?

Insert your email below and we'll send you it along with our regular newsletter and other downloadable guides to help grow your business. You can unsubscribe at any time.

Your year end accounting checklist

To make things simple, we’ve boiled down your year end accounting checklist into these easy steps: 

  1. Get your financial statements
  2. Collect due invoices
  3. Sort your paperwork
  4. See if you have any unused expenses
  5. Check your employee data is up to date
  6. Make backups
  7. Put together your statutory accounts
  8. Don’t forget your company tax return 
  9. Submit and pay!

Or, if you decide to work with an accountant, this checklist becomes even simpler. 

  • Hand your records over
  • Let them file everything
  • Relax

I know which one I’d prefer.

Top-Rated Online Accountants:

Accounting SoftwareCheapest PackageValue For MoneyOur RatingReviewOfficial Site
The Accountancy Partnership£24.50/moExcellent
9.4
Read ReviewVisit Website
Osome Reviews£42/moGood
9.3
Read ReviewVisit Website
MoreThan AccountantsVariableGood
9.1
Read ReviewVisit Website
Photo of author
Author
Business4Beginners has been advising new businesses owners since 2013. The founder, Paul Bryant, has created, grown and sold several successful businesses and remains the editor and fact-checker of all content published on the site.
Share on:
Main Newsletter - Special Report

Why businesses fail eBook

SPECIAL REPORT:

Why 1 In 5 Businesses Fail In Their First Year

Download your FREE copy when you subscribe to our email newsletter with regular updates and business-boosting tips.

You can unsubscribe at any time.
See our Privacy Policy.