Year-end accounts for sole proprietors and partnerships will serve as the foundation for the business owners’ self-assessment tax filings.
The year-end accounting for a partnership will also show the amount on each partner’s current account. The limited company accounts for owner-managed limited firms will contain information on the directors’ salary and dividends given to shareholders, which must be reconciled with their self-assessment tax return.
The year-end accounts are a goldmine of information about your company. You can evaluate if the margin on your sales pricing is adequate and how the most recent performance compares to the previous year. Sales and spending movements are transparent, helping you to make better judgments in the future. Anomalies are identified and can be examined. Having year-end accounts puts you closer to your firm and contributes to its success.
Banks will also want to see a set of accounts from self-employed individuals seeking to acquire capital or apply for a mortgage.
imited businesses, partnerships, and single proprietors are able to choose whatever year-end they like.
Many business owners will select either the calendar year or the tax year (either 31st March or 5th April). Choosing a tax year will calculate your tax liability based on the most recent completed accounting and, as a result, some business owners want to have a tax year-end so that they can better predict their tax burden. If you choose the 31st of March or the 5th of April, you will avoid any onerous overlap relief calculations for lone traders or partners.
Alternatively, you may select a year-end that works for your company – a calm time of year when you can get everything together: tally up goods, describe unbilled work, and so on.
Consider making the year finish 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 normally have nine months from the end of the fiscal year to finish its accounts, but it’s always a good idea to check the Companies House website to see when the company accounts filing date is.
Allow yourself as much time as possible to prepare the accounting. Rushing can lead to mistakes, and you may need to locate receipts or bank documents.