Year-end accounts can feel like a black box: you send off your records, and a few weeks later a set of accounts comes back to sign. Here's what actually happens during year-end accounts preparation, what your accountant needs from you, and the deadlines that apply.
Every business has a year end, and for most owners it means one job: getting the year-end accounts done. For a limited company, those accounts are a legal requirement, filed with Companies House and used to work out your Corporation Tax. For a sole trader, the year-end figures feed straight into your Self Assessment tax return. Understanding what happens during year-end accounts preparation makes the whole process quicker, cheaper and far less stressful, whether you're in Bristol or anywhere else in the UK.
What are year-end accounts?
Year-end accounts, also called annual or statutory accounts, summarise how your business performed over the year and where it stood at the end of it. For a limited company they usually include:
- A profit and loss account, showing income, costs and profit for the year
- A balance sheet, showing what the company owns and owes on the last day of the year
- Notes explaining the figures and the accounting policies used
Sole traders don't file accounts publicly, but they still need accurate year-end figures to complete their tax return. Since the 2024/25 tax year, sole traders are taxed on their profits for the tax year itself (6 April to 5 April), so many find it simplest to line their accounting year up with it.
What happens during year-end accounts preparation?
- Bringing the books up to date. Every transaction for the year is recorded and categorised, and every bank account is reconciled to its statement.
- Year-end adjustments. Costs and income that belong to the year but haven't been paid or invoiced yet (accruals and prepayments) are accounted for, along with closing stock and bad debts.
- Fixed assets. Equipment and vehicles bought during the year are added to the asset register, and depreciation is charged.
- Draft accounts and review. A draft set of accounts is prepared and reviewed with you. This is the moment to ask questions and spot anything that looks wrong.
- Tax computation. Your accountant works out the tax due, adding back items that aren't tax-deductible and claiming capital allowances on assets instead.
- Approval and filing. Once a director approves the accounts, they're filed with Companies House, and the Company Tax Return is filed with HMRC.
What your accountant needs from you at year end
Most delays at year end come down to missing information. You'll speed things up, and keep costs down, if you have the following ready:
- Bank, credit card and loan statements covering the full year
- Sales invoices, and a list of customers who still owe you money
- Purchase invoices, receipts, and a list of suppliers you still owe
- Details of any equipment, vehicles or property bought or sold
- A stock count at the year-end date, if you hold stock
- Payroll records, including any bonuses or benefits
- Any money you've taken out of, or put into, the business yourself
- Dividend paperwork, if your company has paid dividends
For a fuller list to work through, see our year-end checklist for getting your accounts ready.
Year-end accounts deadlines
- Annual accounts: private limited companies must file with Companies House within 9 months of the end of the financial year
- First accounts: due at Companies House 21 months after the company was registered
- Corporation Tax payment: due 9 months and 1 day after the end of the accounting period
- Company Tax Return: due 12 months after the end of the accounting period
- Sole traders: the online Self Assessment deadline is 31 January after the end of the tax year
Companies House charges an automatic penalty for late accounts, from £150 for accounts up to a month late to £1,500 for accounts more than six months late, and the penalty doubles if your accounts are late two years in a row.
Micro-entity and small company accounts
How much detail your accounts need depends on your company's size. A company is a micro-entity if it meets at least two of these: turnover of £1 million or less, £500,000 or less on its balance sheet, and 10 employees or fewer. It's small if it meets two of: turnover of £15 million or less, £7.5 million or less on its balance sheet, and 50 employees or fewer. Smaller companies can prepare simpler accounts, though the way accounts are filed is changing, with software-only filing and new profit and loss requirements coming from April 2028.
Use your year end for tax planning
Year end isn't only about compliance. Before your year closes, it's worth talking to your accountant about timing larger purchases to make the most of capital allowances, making pension contributions, and how you'll take money out of the business. Once the year has ended, many of those options have gone.
Year-end accounting services from LN Accountants
We prepare year-end accounts and tax returns for sole traders, small businesses and limited companies across Bristol and the UK, all for a clear fixed monthly fee. Because we keep your books up to date through the year, year end becomes a review rather than a scramble. Find out more about our annual accounts service, or get in touch.
Frequently asked questions
How long does it take to prepare year-end accounts?
It depends on the size of the business and the state of its records. If your bookkeeping is up to date, a small business's accounts can often be prepared within a few weeks of your accountant receiving everything. Missing information is the most common cause of delay.
Can I prepare my own year-end accounts?
You can, and some sole traders with simple finances do. For a limited company it's more involved, because the accounts must follow accounting standards and company law, and they're publicly available at Companies House. Most directors use an accountant to get them right and claim every allowance available.
What happens if I miss the Companies House deadline?
Companies House charges an automatic late filing penalty, from £150 for accounts up to a month late to £1,500 for accounts more than six months late. The penalty is doubled if your accounts are late two years in a row.
Do sole traders need year-end accounts?
Sole traders don't file accounts with Companies House, but they still need accurate figures for the year to complete their Self Assessment tax return and work out the tax they owe.
