YEAR-END ACCOUNTS FOR LIMITED COMPANIES

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Our year-end accounts service deals with the preparation and filing of your private limited company's annual accounts and company tax return. A copy of your year-end accounts should be sent to all shareholders, Companies House and HMRC. The accounts must include your company’s:

- Balance sheet;

- Profit and loss account;

- Notes about the accounts; and

- Director’s report.

YEAR-END ACCOUNTS PREPARATION & FILING SERVICE

When preparing year-end accounts, there are 3 size classifications of companies to consider: small (sub-set micro-entities), medium or large. Your company will be classified as 'small' if it has any 2 of the following:

- A turnover of £10.2 million or less;

- £5.1 million or less on its balance sheet; and

- 50 employees or less.

If your limited company qualifies as a small company, you do not have to get your year-end accounts audited. This means we can send simpler accounts to Companies House (must be agreed by all members). Some companies must have an audit even if they meet the rules for not having one. Further information can be found here.

Abridged accounts contain a simpler balance sheet (signed by a director) and a simpler profit and loss account (optional). You will decide whether you wish us to send a copy of the director’s report and profit and loss account to Companies House. Be aware filing abridged accounts means less information about your company will be publicly available from Companies House.

WHAT IS CORPORATION TAX?

Did you know that Corporation Tax is the fourth largest (after Income Tax, National Insurance contributions and VAT) source of government revenue in the UK? As the name suggests, it is a corporate tax levied on the profits made by:

- UK resident companies; and

- Entities registered overseas with permanent establishments in the UK.

Until 1965, companies were subject to income tax on their profits at the same rate as was levied on individual taxpayers. The Finance Act of 1965 replaced this structure for companies and associations with a single corporate tax, which borrowed its basic structure and rules from the income tax system.

YOUR LIMITED COMPANY

Your limited company is subject to Corporation Tax on its profits. If your company is based in the UK, it pays Corporation Tax on all its profits from the UK and abroad. If it is not based in the UK, but has an office or a branch here, it only pays Corporation Tax on profits from its UK activities. 

You must send a company tax return (CT600) if you have received a ‘notice to deliver a company tax return’ (CT603) from HMRC. This notice is sent to every company, HM Revenue and Customs believes to be active and it defines requirements which include:

- Details of how the specified information has been calculated from relevant figures in the accounts; and

- A copy of the year-end accounts for the period covered by the company tax return.

The current Corporation Tax rate for companies with profits under £50,000 is 19%. The main rate (companies with profits over £250,000) is 25%.

THE DEADLINE

Companies usually have to deliver their Corporation Tax returns no later than 12 months after the end of the accounting period. If you are setting up a new small business, you need to make sure you register it for Corporation Tax within 3 months of starting to trade. 

The deadline to pay your Corporation Tax bill is 9 months and 1 day after the end of your accounting period for your previous financial year. For example, if your accounting period ends on the 31st of March, your Corporation Tax deadline is the 1st of January.

SUPPORT & ADVICE FOR UK SMALL BUSINESSES

Xcountant® helps small business owners save time and money while complying with rules and regulations. Our accountants prepare your annual accounts and help you to understand your company's financial position; both on its own and within its industry. The profit and loss account and balance sheet are some of your most powerful tools for understanding your business's health and making informed decisions. Join Xcountant® now!