In these turbulent times, financial reporting is probably not at the forefront of most accountants’ minds but at Dunkley’s it continues to form a key part of our business services.
Directors of limited companies will be familiar with the concept of financial reporting, which centres on filing the company tax return and submitting the statutory accounts once a year.
The company tax return includes details of your company’s income, minus any expenses, reliefs or tax allowances. What remains is the profit which is subject to corporation tax at 19% in 2020/21.
The annual accounts for your company’s accounting period contain a profit/loss statement and a financial statement, which shows the value of your company based on its assets, liabilities, capital and reserves.
These documents need to be sent to HMRC and Companies House at the end of your company’s accounting period. This can differ from the tax year which runs from 6 April to 5 April, although many directors prefer to have their company’s accounting period from 1 April to 31 March.
It’s easy to see why financial reporting can be a daunting task for directors of limited companies, especially those who are going through the process for the first time. That’s where our experts can help.
Company accounts filing deadline temporary extension
Among the deluge of government guidance issued this year, we’ve kept tabs on the Companies House guidance to advise directors on what to do if their company is unable to file its statutory accounts on time.
Prior to 27 June 2020, Companies House was granting extensions on a case-by-case basis before legislation was passed to temporarily extend deadlines for filing accounts after this date.
If your company’s filing deadline falls on or between 27 June 2020 and 5 April 2021, Companies House has automatically extended your company’s filing deadline.
Most limited companies and limited liability partnerships have between nine months and a year to file their statutory accounts for their latest accounting periods.
At Dunkley’s, we factor in and disclose the effects of COVID-19 in our clients’ financial statements and adjust the company’s assets and liabilities when necessary.
We also recommend you continue to file your accounts at Companies House within nine months of your company’s accounting period end date.
Why it’s worth preparing your documents
If you have your company expenses in order when you bring them to us, we’ll be better placed to deduct every pound you can reasonably claim from your profits. And lower profits reduce your corporation tax bill.
Chase up any late payments your company is due before the end of its accounting period. This will help us reconcile your company accounts to ensure they are accurate.
Without wanting to sound like a broken record, it really is important to have records for everything – invoices from suppliers, bank and credit card statements, or paperwork covering any other income you receive.
Paying corporation tax
Towards the end of our financial reporting service, once your company’s statutory accounts are prepared, we’ll know how much you need to pay HMRC in corporation tax.
At the time of writing, corporation tax still needs to be paid nine months and one day after the end of your company’s accounting period.
The Government has not extended the deadline for paying corporation tax in the same way it has done for income tax payments on account relating to 2019/20, although this might change at a later date.
Hopefully, this blog post makes the benefits of using Dunkley’s for your company’s financial reporting pretty obvious. Along with the rest of the services in our business advisory suite, we have the expertise to help your company grow.