Year End Accounts Checklist UK for your Small Businesses

The end of the financial year is a critical time for any small business owner in the UK. It’s when you need to ensure all your financial records are in order, your accounts are up to date, and you’re ready to submit your tax returns.

To help you navigate this busy period, we’ve compiled a Year End Accounts Checklist for UK businesses. By following this checklist, you can ensure that your accounts are prepared correctly, maximise your tax savings, and stay compliant with HMRC requirements.

Why Are Year-End Accounts Important for Small Businesses?

Year-end accounts are more than just a legal requirement – they’re the foundation of understanding your business’s true financial health. For UK small business owners, preparing accurate year-end accounts ensures you stay compliant with HMRC and Companies House, while giving you a clear picture of how your business has performed over the past 12 months.

Your year-end accounts typically include:

• A Balance Sheet – showing what your business owns (assets) and owes (liabilities) at the end of your financial year.
• A Profit and Loss Statement (P&L) – summarising your income, expenses, and net profit or loss.
• A Corporation Tax Return (CT600) – required for limited companies to report taxable profits to HMRC.

Maintaining accurate records isn’t just about ticking boxes. It helps you:

• Identify growth opportunities by spotting trends in revenue, expenses, and margins.
• Plan ahead with data-driven decisions for budgeting and cash flow management.
• Avoid penalties from late or inaccurate filings with HMRC or Companies House.
• Boost your credibility with lenders and investors who rely on year-end accounts for financial transparency.

Tip: Even if you use accounting software throughout the year, a professional review before filing your accounts can uncover missed deductions, incorrect classifications, or opportunities for tax reliefs (such as capital allowances).

For full guidance on what needs to be submitted and when, visit the GOV.UK guide to filing your company accounts

Essential Steps for Preparing Your Year-End Accounts: A Checklist

Getting ready for your financial year-end doesn’t have to be stressful – with a clear checklist and good preparation, you can wrap up your accounts accurately, efficiently, and in full compliance with UK law. Below is a step-by-step guide designed specifically for UK small businesses.

1. Reconcile Your Accounts

Start by ensuring all your business bank accounts, credit cards, and loan accounts are reconciled. This means checking that your internal records match your bank and financial statements.

Checklist:

• Compare your bookkeeping software or ledgers against bank statements.
• Correct any discrepancies or duplicate entries.
• Reconcile your cash book, credit card, and loan accounts.

Tip: Use automated bank feeds (available in cloud platforms like Xero, Balance or QuickBooks) to make reconciliation easier and catch missed transactions in real time.

2. Review Your Income and Expenses

Ensure every bit of income is recorded and that you’ve claimed all allowable business expenses. This step directly affects your taxable profit and ultimately, how much tax you pay.

Include:

• Sales invoices and receipts
• Business purchases and expenses (travel, subscriptions, office costs, etc.)
• Payroll and pension contributions

Common Mistake to Avoid: Forgetting to include reimbursed expenses or personal costs accidentally logged as business spend – both can trigger HMRC scrutiny.

3. Update Your VAT Records (If Applicable)

If your business is VAT-registered, your VAT returns and records must be complete and accurate under Making Tax Digital (MTD) rules.

Checklist:

• Ensure all VAT returns have been submitted to HMRC.
• Reconcile VAT on sales and purchases.
• Prepare your final VAT return for the year.

Useful Link: Check VAT record-keeping rules on GOV.UK.

4. Prepare and Submit Your Payroll Information

Your payroll records must be accurate and in line with HMRC Real Time Information (RTI) reporting requirements.

Checklist:

• Review gross pay, bonuses, and benefits for directors and staff.
• Check PAYE and National Insurance
• Confirm pension contributions and final payroll submissions.

Tip: Run an end-of-year payroll report and issue P60s to employees promptly.

5. Review Depreciation and Amortisation

Your business assets – such as vehicles, computers, and machinery – lose value over time. Recording this depreciation accurately ensures you’re not overstating profits.

Checklist:

• Apply depreciation to all fixed assets in line with accounting standards.
• Apply amortisation to intangible assets like software licences or trademarks.

Useful Link: Learn about capital allowances on GOV.UK.

6. Check Outstanding Invoices

Unpaid invoices can distort your cash flow and financial statements. Review your accounts receivable and follow up with any late-paying clients.

Checklist:

• Send reminders for overdue invoices.
• Adjust for bad debts where payment is unlikely.
• Record write-offs properly to reflect accurate profit levels.

Tip: Consider using invoice automation tools (like Chaser or GoCardless) to improve payment collection.

7. Assess Stock Levels and Adjust Valuations

For businesses with inventory, your year-end stocktake affects both your profit and your tax position.

Checklist:

• Conduct a physical count of all stock.
• Adjust for damaged, obsolete, or unsellable items.
• Update your accounting software with the correct closing stock value.

Example: Overvaluing stock can increase taxable profit – be realistic and consistent in how you value it.

8. Finalise Your Financial Statements

Your financial statements provide the official record of your business’s performance over the year.

Documents to Prepare:

• Profit and Loss Account – summarises income and expenses.
• Balance Sheet – shows assets, liabilities, and equity at year-end.

These are essential for your Corporation Tax Return (CT600) and for filing with Companies House (if applicable).

Tip: Having your accountant review these statements before submission helps identify potential tax savings and ensure full compliance.

9. Account for Loans and Liabilities

Review all business loans, credit agreements, and other liabilities.

Checklist:

• Record loan interest and repayments accurately.
• Confirm outstanding balances match lender statements.
• Check that repayment schedules are updated for next year’s budget.

10. Prepare for Corporation Tax (If Applicable)

If you operate as a limited company, your year-end accounts form the basis of your Corporation Tax calculation.

Checklist:

• Calculate profits after allowable expenses.
• Apply relevant reliefs (such as Annual Investment Allowance).
• File your CT600 return with HMRC.
• Pay Corporation Tax within nine months and one day of your year-end.

Useful Link: Corporation Tax deadlines on GOV.UK.

11. File Your Accounts with Companies House

All limited companies must file statutory accounts with Companies House within nine months of the financial year-end.

Checklist:

• Ensure your accounts meet UK FRS 105 or FRS 102 standards.
• File electronically via Companies House WebFiling or through your accountant.
• Retain copies for at least six years.

Warning: Missing your Companies House deadline can result in automatic penalties starting from £150 and increasing to £1,500 for longer delays.