Limited company financial accounts are often referred to as Annual Accounts
They should be prepared every year to report the financial activity and performance of your Company during its most recent financial year. This is usually a 12 month period that ends on the ‘accounting reference date’ (ARD), which normally falls or the anniversary of company formation. Annual accounts are also used to work out how much Corporation Tax a Company is required to pay on its taxable profits.
Annual Accounts must include:
A Balance sheet, which shows the value of everything your company owns, owes and is owed on the last day of the financial year.
A Profit and loss account, which shows your company’s sales, running costs and the profit or loss it has made over the financial year.
Notes about the accounts
A Director’s Report
The amount of work that goes into producing a set of accounts depends on the size of your business, number of transactions, how well your accountancy records are maintained, if the business is VAT registered and if the business handles large quantities of cash, etc.
Annual Accounts not only determine the tax liability arising from the business, they also measure how well your business has performed. They also help us to obtain accurate trading figures to help identify any potential savings or areas of improvement.
There are many different types of Company Accounts and all Companies whether trading or dormant, must provide copies of their accounts to their members (shareholders or guarantors) as well as Companies House.
There are different types of company accounts:
We can then help you to analyse the findings regardless of the type of accounts which need to be submitted.
Would you like to have more money to enjoy the finer things in life?
Tax is a cost all business owners have to pay but we’ll help you keep it as low as possible through clever and innovative tax planning.
If you leave your business tax planning until after the end of the tax year or your accounts year, then you will limit the potential options for reducing your tax liability.
Meeting with your Accountant and discussing your taxes can minimise the overall tax liability you and your business owe. Typically, this means deciding whether to accelerate or defer income or expenses before the end of the calendar year.
Tax planning is advantageous for analysing your financial situation and to plan your financial goals. For example, if you anticipate being in a lower tax bracket next year, its ideal to defer as much income as possible until after your year end and, accelerating any deductions you plan to take. Similarly, if you have gained new clients or have contracts lined up that are likely to push you into a higher bracket next year, it’s better to bring in more income now and pay taxes on it at the lower rate. This then allows you to effectively minimise your tax liability.
Tax planning encompasses many different aspects, including the timing of both income and purchases and other expenditures, selection of investments and types of retirement plans as well as personal status and family considerations.
Tax Returns are required to be filed by Law with HM Revenue & Customs (HMRC) every year to declare tax liabilities
Compiling the information needed for your tax returns and ensuring they are submitted correctly is a daunting task, especially considering the constant changes in legislation.
The type of return you’ll need to submit depends on the nature of your business. Below is a few examples:
Self Assessment Tax Returns
You must complete a Self Assessment Tax Return if you are in business, either as a self-employed person or as a Company director. Simple planning and the right advice can make completing your income tax return relatively painless.
If you’re a business owner and employ staff, then your employees paying tax under the PAYE system are not required to file a tax return, because the PAYE system operates to withhold the correct amount of tax from their wages or salaries.
Corporation Tax Returns
All active companies (and some dormant ones) must file Corporation Tax Returns as this is a legal requirement.
The ever changing legislation can make completing your return a mind field and adequate time and planning is needed to ensure you receive adequate tax savings.
Value Added Tax (VAT) is a tax levied by the government on sales of goods and services.
All businesses which have an annual turnover of more than the current VAT threshold (currently £82,000) need to file a VAT Return to HMRC every quarter.
We analyse all the information in ample time before your Self Assessment, Corporation Tax and VAT Returns need to be filed to see if any tax savings can be made.
Ensuring all the information you supply is correct is essential to ensure you receive sufficient tax savings for yourself and your business. It also minimises the risk in HMRC contacting you about your tax affairs. Tax Planning is therefore paramount to ensure you receive sufficient tax savings.
It is imperative for businesses to prepare monthly or quarterly management accounts
Basic management accounts provide detailed information such as sales, analysis of expenses and a breakdown of customers (debtors) and suppliers (creditors). However, most businesses will benefit from a more detailed set of accounts, incorporating a detailed profit and loss, a balance sheet, a cash flow statement and a full analysis of fixed assets, stock, debtors and creditors. How often these accounts are produced is dependent on the size of your business. However, we recommend monthly management accounts
In order to keep track of your activity, it’s important to have a good accounting system in place, such as the cloud based solution Xero, as this will provide you with a clear overview of your current financial position, in real time, at any time, from anywhere in the world!
Our Clients have benefited greatly from being able to access their financial information at any time, as it allows them to monitor their business finances in real time and allows to watch market trends. It is also useful in tracking your customers and be aware of any outstanding payments. This is essential as it is surprising how many small businesses don’t realise they are making losses until their cash flow starts to decrease. Monthly management accounts also workout what level of income is required to cover all of your fixed costs.
Management accounts also prove to be useful as your lenders may want to see a more detailed version of your finances, and they will also help with securing credit in the future.
Do your Accountants provide you with thorough information, giving you the insight to make sound business decisions?
Effective bookkeeping is a key part of any business providing you with vital information
Bookkeeping can provide you with a precise and effective overview of your businesses finances. With a skilled bookkeeper at your side, you can stop worrying about where your money is going and focus on building your business.
Tax saving efficiencies are a key reason to maintain a detailed set of books as this allows you to plan your personal and corporation tax liabilities, but there are other many other reasons to keep effective records. Understanding how much revenue your business generates and reviewing your incomings and outgoings enables you to focus on key areas of improvements. Bookkeeping also provides you with the insight on how your performing against your competitors. Reviewing your business on a regular basis provides you with the knowledge to set goals and increase profits.
We can provide experienced bookkeepers or finance teams to suit your needs to work in the very heart of your business, or alternatively your bookkeeping requirements can be managed at one of our offices. Whatever the needs of your business, bookkeeping is essential in financial production.
Managing your payroll can be time consuming and a drain on your resources
Payroll in summary is a Company’s list of employees, but the term is commonly used to refer to the total amount of money that a Company pays to its employees. Businesses normally have to operate PAYE (Paye As You Earn) as part of payroll. PAYE is HMRC’s system to collect Income Tax and National Insurance from your employees.
The task is made all the more difficult by the constant changes with tax legislation each year and the possibilities of incurring penalties for non-compliance. Also, the introduction of Auto-Enrolment to make businesses responsible for pensions, is proving to be another time consuming payroll task which can prove daunting for Employers.
We can provide a fully compliant payroll service which is crucial to the running of your business, ensuring all your payroll and pension processes are effectively managed and submitted on time.
Where an Audit is required, our approach is designed to add value to your business
Our team will always offer a personal tailored service to meet your individual needs providing a thorough audit of your accounts and accounting systems.
An Audit is primarily an independent report to your shareholders stating whether we have, or in some cases have not found material misstatements in the company’s accounts. Audits are conducted by approved auditors who are regulated by law but we believe an audit provides much more. Our approach to auditing can transform what is believed to be an unnecessary overhead into a valuable annual review for management.
The benefit of having an Audit is they can potentially highlight weaknesses in your Company’s systems, enabling us to advise you on how to make improvements, especially concerning improving your efficiency and cutting costs. Audits can also establish whether your Company is complying with taxation and employment legislation.