Year-end accounts are often used to prepare your Self-Assessment tax return and give essential information about your firm.

Year end accounts will form the foundation of the company owners’ self assessment tax return for sole traders and partnerships.

In the case of a partnership, the year-end accounts will also show the amount on each partner’s current account. For owner-managed limited firms, the limited company accounts will store information of the directors’ salary and the dividends given to owners, which will need to balance with their self assessment tax return.

The year end accounts give essential information about your firm. You can evaluate whether the margin on your sales pricing is set adequately and how the newest performance compares to previous year. Movements in sales and costs are exposed naked, helping you to make smarter judgments in the future. Anomalies are identified and may then be examined. Having year end accounts puts you closer to your company and will assist drive success.

Banks would also want to see a set of accounts from self-employed individuals seeking to acquire capital or get a mortgage.

Making a Decision on a Year End

Limited corporations, partnerships, and sole proprietors are able to choose their own fiscal year end.

Many company owners will choose between a calendar year or a fiscal year (either 31st March or 5th April). Picking the tax year will make your tax burden based on the latest finished accounting and hence as current as feasible. Consequently, some company owners prefer to have a tax year close, since they have a clearer idea for what their tax liabilities would be. Opting for the 31st March or 5th April will also prevent any problematic overlap relief calculations for single traders or partners.

Alternatively, you may select a year end that is convenient for your company – a calm time of year when you can take the time to gather everything: stock counts, unbilled work, and so on.

Consider making the year finish all the same if you have additional company interests. This implies that the deadlines will be simpler to remember since they will be similar, but it also means that they will all arrive at once!

You should aim to complete single trader and partnership accounts well in advance of the tax return date of January 31st. Companies usually have nine months from the end of the fiscal year to finish their accounts, but it’s always a good idea to double-check the company accounts filing date on Companies House’s website.

Allow as much time as possible to prepare the accounting. Rushing may result in mistakes, and you may need to locate receipts or bank statements. It also helps you to examine whether you’ve claimed all you’re entitled to and if any tax planning options exist.