Whether it’s been a jaunt abroad, a weekend staycation, or simply time away from the screen, there’s nothing like that back-to-work feeling after some much-needed headspace. Yet even if you haven’t had chance to escape this summer, the holiday season provides the perfect opportunity for SMEs to get their accounts in order. With the deadline for your tax return 12 months after year end (for Corporation Tax and Companies House it’s nine), businesses now have less than half the year to get their affairs in order. So as not to incur unwanted fines – the later you leave it, the more severe the penalty, and some accountants will charge you for late submission of data to them – here are a number of things to consider when submitting your accounts to HMRC and Companies House, from what to file to managing that all-important housekeeping.
What exactly do I need to file?
Before year end, you’ll need to ensure your Company Tax Return, or CT600, reaches HMRC; this comprises your total business income – minus any tax allowances and expenses. The remaining figure is then used to determine how much Corporation Tax is owed. Annual Accounts that require submission are made up of these three segments: the Income Statement, Statement of Financial Position, and the Footnotes:
> Income Statement – this record contains any profit or loss your company has made over the relevant accounting period.
> Statement of Financial Position – otherwise known as the ‘balance sheet’, this statement communicates the assets, liabilities and capital of your company, culminating in its overall value.
> Footnotes – these detail any further information regarding transactions, such as loans or advances, between your company and any of its directors.
For businesses that prepare accounts via the Financial Reporting Standard for micro-entities, or FRS 105, Companies House also require the Statement of Financial Position and the Footnotes; it’s important to know that these findings will then be published on the Companies House website.
Taking control of your admin
When it comes to mastering your Company Tax Return, there are several bits of housekeeping you’ll want to action in order to provide the most accurate report; addressing this ahead of time will only make it easier come submission day. Business expenses are a perfect example of this, as every transaction you claim equates to less Corporation Tax paid at year end. If said item/service was bought exclusively for your business, such as staff uniforms, travel costs, or a training course, chances are you can claim it back. If unsure, you can always double-check this with HMRC here.
From expenses to overdue invoices, chasing up any outstanding payments should also be a priority to ensure your accounts remain accurate; allow enough time for clients to settle up ahead of sharing your tax return to avoid any unnecessary stress. Similarly, keeping on top of your paperwork (and yes, that includes your large wad of receipts) is crucial in maintaining visibility. Whether it’s copies of statements from your bank or suppliers, or any other records of income, you must keep track of these transactions for at least six years from the end of the relevant accounting period.
Business MOT – your summer service
Year end can prove a hectic time for any SME owner, so why postpone your annual business review any longer? While submitting your tax return can be a huge sigh of relief, it’s also worth stretching your efforts that bit further to give your company the best possible start as you approach the new financial year.
As a limited company director, you’re required to re-confirm your details with Companies House once a year (failure to submit this Confirmation Statement or Annual Return will result in a fine), plus you’ll also need to plan for your VAT returns (if VAT registered on the flat rate or standard scheme). You may also wish to review your suppliers and/or service providers to establish you’re getting the very best deal from your existing set-up. In addition, wise financial decisions – such as assessing your pension options or paying into an ISA – can help you save towards a brighter future; efficient tax planning can also help minimise your tax bill in the long term.
From knowing what to claim on expenses to keeping your records shipshape, Adams Moore offers a range of accountancy services bespoke to your business needs. With a free hour-long initial consultation available at our Tamworth offices to all prospective clients, contact us for a friendly chat.