Can I Do My Business Accounts Myself?

Running a business means that you need so many different hats and you’ll often find yourself wondering “can I do my business accounts myself?”. You need to understand marketing, sales, finance, HR… The list goes on. So when it comes to the end of your financial year, does it fill you with dread at the anticipation of having to file your accounts? If you ask most people, they’d tell you to go and find the best accountant you can straight away, and we second that!

If you are a sole trader, your accounting requirements are generally fairly straightforward and so to save money a lot of self-employed people choose to go it alone and compile their annual accounts and tax return on their own. However, when you become VAT registered or you form a Limited Company, it becomes a lot more complex! If you have prior knowledge with bookkeeping or accounting then you might decide to continue working on your accounts on your own, but if not then now would be the time to consider partnering with a professional accountant.

When you become VAT registered or form a Limited Company, it is at this point that you should be considering the cost of an accountant vs the risk of filing accounts yourself. If you make a mistake or miss a deadline then you could be on the receiving end of some very unwelcome and costly penalties from HMRC and Companies House.

What Records Do I Need To Keep?

Your business’s financial records must be kept for a minimum period of six years and must include the following:

All income and expenditure
Details of all assets
Any monies owed to or by the business
Inventory of stock
Stock takings
Records of goods purchased and sold by the business
Who these goods were purchased from or sold to

These financial records will inform your statutory accounts and tax return, as well as generating the value of corporation tax that your business needs to pay. If you are a VAT registered company then you will also have to complete a VAT return and pay a VAT bill on a quarterly basis. Your statutory accounts must be filed within 9 months of your Accounting Reference Date, which is usually the last day in the month that your business was registered with Companies House.

How Do I Submit My Statutory Accounts?

Your company accounts must comply with the UK Generally Accepted Accounting Practices. This means that there should be a Balance Sheet, which should detail all assets and liabilities of the business. The Balance Sheet should be accompanied by a Profit and Loss account that shows all of the sales that the business has made, the costs that the business has incurred and whether this has generated a profit or loss for the year. You will also need to include a Director’s report as well as an Auditor’s report if it applies to your business.

What About My Company Tax Return?

Your Company Tax Return must be filed within twelve months of the end of the business’s financial year-end date. This must be done digitally through the portal and must include your CT600 form, your corporation tax calculations and statutory accounts as well as any relevant information about capital allowances, directors’ loans and any losses being carried forward. But, THE most important thing to remember here is that the payment for your corporation tax is due nine months and one day after the end of your financial year. So you have twelve months to submit the paperwork but only nine months to pay!

Oops… I’m Submitting My Accounts Late, What Will Happen?!

Oh dear, it looks like a fine is heading your way… Late statutory account submission penalties currently range from £150 to £1,500 and will increase each year you submit late accounts! If you fail to file your accounts altogether then you can be prosecuted and fined up to £5,000. If your tax return is late then, currently, your fine could range from £100 to 10% of your unpaid tax and late submissions three times in succession will incur a penalty of, at least, £500.

How Can I Avoid Penalties?

As you’ve seen, it’s a costly mistake to make if you can’t submit accurate statutory accounts or tax returns on time and unfortunately the only way to avoid these penalties is to do what you need to do when you need to do it, without errors or delays. If there is any doubt in your mind that you and your business doesn’t have the necessary skills to prepare your accounts and tax returns then you absolutely should think about outsourcing these tasks.

Backoffice Nationwide have proven expertise in submitting VAT returns, preparing statutory accounts and corporate tax returns for businesses of all sizes and can give you peace of mind, knowing that your requirements will be fulfilled accurately and on time. You can trust that we will give your business the time and attention that it deserves to understand your financial situation and ensure that your returns are prepared efficiently.

Contact Backoffice Nationwide and speak to our team of experts today and to see how we can help support your business and take the stress out of your statutory accounts.