Year-End Accounting Checklist for UK Businesses

Your company’s financial year end triggers a series of accounting tasks and filing deadlines. Missing any of them can result in penalties from HMRC or Companies House, so having a clear checklist makes all the difference.

This guide walks through what you need to do, in roughly the order you should do it.

Key deadlines after your year end

Every UK limited company has the same set of deadlines, but the actual dates depend on when your accounting reference date falls. Here is a summary:

For example, if your financial year ends on 31 March:

• Annual accounts due by 31 December
• Corporation Tax payment due by 1 January the following year
• CT600 due by 31 March the following year

Get these dates into your calendar now. Better yet, set a reminder a month before each one in a calendar the whole team shares.

Phase 1: Reconcile everything

Before you can prepare your year-end accounts, your records need to match reality.

Bank reconciliation

Go through every bank account and make sure every transaction in your accounting system matches your bank statements. Look for:

• Unreconciled items from earlier in the year
• Bank charges or interest you may not have recorded
• Duplicate entries
• Payments received but not yet allocated to invoices

If you use live bank feeds, most of this should be done already. But always do a final check for the last day of the financial year.

Petty cash

Count your petty cash and reconcile it against your petty cash log. If there is a discrepancy, investigate and record any adjustments. Even small differences should be documented.

Credit cards

Reconcile every business credit card statement. Make sure all transactions have been categorised correctly and that the balance in your accounting system matches the statement balance at year end.

Phase 2: Review your ledgers

Sales ledger (debtors)

Review your accounts receivable and check for:

• Invoices that are unlikely to be paid (consider writing them off as bad debts)
• Credit notes that have not been applied
• Disputed invoices that need resolving
• Prepayments received from customers

Chase any outstanding invoices before the year end if possible. This improves both your cash position and the accuracy of your accounts.

Purchase ledger (creditors)

Review your accounts payable and look for:

• Supplier invoices you have received but not yet entered
• Goods or services received before year end but invoiced after
• Disputed invoices
• Credit notes from suppliers that have not been applied

Accruals and prepayments

Accruals are expenses you have incurred but not yet been invoiced for. Common examples:

• Utility bills for the last month of the year
• Professional fees for year-end work
• Staff bonuses declared but not yet paid
• Interest on loans

Prepayments are expenses you have paid in advance. Common examples:

• Annual insurance premiums
• Rent paid ahead
• Software subscriptions paid annually

You need to adjust your accounts so that only the portion relating to this financial year is included in this year’s figures.

Phase 3: Fixed assets

Review your fixed asset register

Go through your fixed asset register and check:

• All assets purchased during the year have been added
• Any assets sold, scrapped or donated have been removed
• The description, cost and date of purchase are correct for each asset

Calculate depreciation

Apply the correct depreciation charge for each category of asset. Common methods used in the UK are:

Remember that depreciation in your accounts is separate from capital allowances you claim on your tax return. You may depreciate an asset over four years in your accounts but claim the full cost through the Annual Investment Allowance for tax purposes. See our tax tips guide for more on capital allowances.

Phase 4: Stock and work in progress

If your business holds stock, you need to do a stocktake at or near the year end. Count everything physically and compare it against your stock records.

Stock should be valued at the lower of cost and net realisable value. If any stock is damaged, obsolete or slow-moving, write it down to what you could realistically sell it for.

For service businesses, review any work in progress – projects that are partly complete at year end. You need to recognise the appropriate amount of revenue and costs for the work done so far.

Phase 5: Payroll

Final payroll of the year

Make sure the last payroll run of your financial year is complete and all PAYE, National Insurance and pension contributions are correct.

Check employee benefits

Review any benefits in kind provided to employees or directors during the year:

• Company cars
• Private medical insurance
• Gym memberships
• Interest-free loans above £10,000

These need to be reported on P11D forms after the tax year end (5 April), but gathering the information now saves time later.

Director’s loan account

If you are a director-shareholder, review your director’s loan account. If the company owes you money, that is straightforward. But if you owe money to the company, a Section 455 tax charge can apply at a rate equal to the dividend upper rate in force when the loan was made.

If possible, repay the loan or declare a dividend to offset it before the year end.

Phase 6: VAT

Check that your VAT records are complete and accurate for the year. Make sure:

• All VAT returns filed during the year reconcile to your accounts
• The VAT control account balance matches what you owe or are owed by HMRC
• You have not overclaimed or underclaimed input VAT on any items
• Partial exemption calculations are correct (if applicable)

If your year end falls in the middle of a VAT quarter, you will need to apportion some figures. Read more about how VAT works if you need a refresher.

Phase 7: Tax

Corporation Tax computation

Prepare your Corporation Tax computation or provide your accountant with the information they need:

• Adjusted profit (accounting profit adjusted for disallowable expenses and capital allowances)
• Capital allowances claimed
• Any losses brought forward
• R&D tax credits (if applicable)

The main rate of Corporation Tax is 25% for companies with profits above £250,000. The small profits rate of 19% applies to companies with profits below £50,000, with marginal relief for profits between £50,000 and £250,000.

Dividends

If you plan to pay a final dividend, the company must have sufficient retained profits after accounting for Corporation Tax. A dividend cannot be paid out of future profits or if the company does not have adequate reserves.

Document the dividend with proper minutes and dividend vouchers.

Before the final accounts are produced, confirm that profit after tax has been moved correctly into reserves. See closing profit and loss accounts at year end for the year-end close mechanics.

Phase 8: Prepare statutory accounts

Your statutory accounts must comply with UK Generally Accepted Accounting Practice (UK GAAP), usually FRS 102 or the simplified FRS 105 for micro-entities.

Small companies can file abridged accounts at Companies House, which contain less detail than the full accounts. However, your members (shareholders) are entitled to see the full accounts. The abridged option ends from 1 April 2028; see the end of abridged accounts.

What qualifies as a small company?

You qualify for the small company regime if you meet at least two of these criteria:

Phase 9: File and pay

Companies House

File your annual accounts using the Companies House online service or through your accounting software’s direct filing feature. The filing is free.

Late filing penalties are:

HMRC

File your CT600 (Company Tax Return) online through HMRC’s Government Gateway. You need to attach your accounts in iXBRL format and your Corporation Tax computation.

Pay your Corporation Tax by the due date. HMRC charges interest on late payments and can also charge penalties for persistent late payment.

Staying on top of it

The year-end process is much less stressful if your records are accurate throughout the year. Reconciling monthly, keeping receipts organised and using software that automates bank feeds and categorisation means most of the work is already done by the time your year end arrives.

For a deeper look at the filing process, see our guide on how to file your Company Tax Return and our overview of the UK year-end process.