A Guide To Year-End Accounts

What are year-end accounts?

Year-end accounts are the summary of all your business activities from twelve months.

This could include(depending on the size of the firm):

  • Corporation Tax return
  • Directors’ Report (a document that highlights a business’ performance over the year)
  • Balance Sheet ( a document with a list of the company’s assets and liabilities)
  • Profit and Loss Statement ( a document to summarises the revenue, cost, and expenses)
  • Any footnotes

However, if the business is small enough they can apply for abbreviated year-end accounts.

Why do I need to complete year-end accounts?

Year-end accounts are a legal requirement for businesses to complete. They must be submitted to HMRC like your Corporation Tax return, within 12 months of the end of your company’s financial year.

Year-end accounts must also be submitted to Companies House within nine months of the end of your financial year.

When is the year-end?

The year-end is 12 months. It is common for many businesses to align this up with the financial year with the tax year (from the 6 April to 5 April the following year).

How to prepare for year-end accounts?

The year-end account is a summary of nearly all of your business activities from those twelve months, so being organised makes it easier. This includes:

  • keeping track of income and expenditure records
  • floating assets
  • fixed assets
  • company liabilities
  • payroll information and more

With the use of technology, going paperless will help you to keep on track for the year-end accounts.

What are abbreviated year-end accounts?

Smaller businesses may submit ‘abbreviated year-end accounts’. They have met two of the requirements:

  • less than 50 employees
  • less than £10.2 million turnover
  • less than £5.1 million on their balance sheet

Unlike year-end accounts, abbreviated year-end accounts only include a balance sheet, signed by one director.

 

If you need help with further understanding of year-end accounts, get in touch with us at hello@bkplus.co.uk

National Insurance Contributions To Rise – What Does This Mean?

Earlier this week it was announced by Prime Minister Boris Johnson that from April 2022 certain National Insurance (NI) rates are to raise by 1.25 percentage points to bring extra funding to the NHS in order to help with the current crisis within the social care system. This social care levy will be payable by all working adults, this includes workers over the state pension age.

The increase will apply to Class 1 National Insurance Contributions (NICs) which is paid by employees, and will apply to Class 4 NICs which is paid by the self-employed.

If you’re employed…

Currently, employees pay Class 1 NI Contributions, which is 12% on their earnings between £9,568 and £50,270, and then 2% on any income over £50,270.

In line with the NI rise, the tax rates will increase to 13.25% and 3.25%.

Example of how your NI contributions would look following the rate increase:

If you’re self-employed…

Workers who are self-employed pay Class 2 & Class 4 NICs on their profits.

Class 2 is paid if your profits are £6,515 or more a year, which is £3.05 per week.

Class 4 is paid if your profits are £9,569 or more a year. 9% on profits between £9,569 and £50,270. 2% on profits over £50,270.

Only Class 4 NICs will be increased with the NI rise, Class 2 will NOT be impacted. Class 4 NICs will be increased to 10.25% main rate and 3.25% higher rate.

Dividend tax rates will also increase by 1.25% from April 2022.

 

 

If you need help with further understanding of how this will impact you, get in touch with us at hello@bkplus.co.uk