You should consider the following points prior to your accounting period ending. Some forward planning can make the end of period process easier and could accelerate some tax relief the company will benefit from. If you would like to discuss any of this further please book a discussion.
Tax relief is only available on pension contributions in the period they are paid. If you want additional pension contributions to be included in this accounting period then these must be arranged and paid before the accounting period ends. You should note that these must be company pension contributions into the scheme and not personal pension contributions which the company has paid on the employees’ behalf. If you are not sure you should contact your IFA.
Any equipment purchases before the accounts date will reduce the tax liability. If you are thinking about purchasing new equipment you may want to do this prior to the end of the accounting period. This will then mean that you receive the tax relief in this period instead of the following year.
For dividends to be included in the accounts these must be paid (or voted, recorded in minutes, documented and credited to a loan account) prior to the accounts date.
Small companies may choose to operate from home some of the time. It should be possible to establish a claim for tax relief on part of the home expenses using a simple rental agreement. If you believe this applies to you then please contact us so that we can ensure you collate the correct information to make a use of home as office claim.
If you hold stock then you complete a full stock take at least at the period end, we therefore recommend that this is scheduled now. You should list out any stock held including quantities, cost price and sales price.
At the end of the accounting period you should consider whether there is any work that is in progress that has not yet been invoiced, or if any work has been invoiced that is not yet fully complete. In the accounts we need to recognise the income to match with the work actually done during the period and so may need to make an adjustment for this.
If the company owes anyone money then you might want to consider charging interest on this this balance. There would potentially be no tax on this if the non-dividend income for tax year 2023-24 is less than £12,570+5,000-interest charged. The interest rate must be within the bounds of commerciality, and we suggest 15% rate as an upper limit. There must be an agreement with the company to charge interest. This should be in place before the accounting period ends.
We can process this interest charge for £250+VAT. This includes calculating the interest payable, providing the agreement template, dealing with the required bookkeeping and accounting entries and completing the form CT61.
If the company owes anyone money and this will not be repaid until at least one year after the end of the accounting period you might want to consider getting a formal agreement in place. This will then allow us to include the loan within non-current liabilities in the accounts. This will improve the net current assets on the balance sheet.
If any director owes the company money then you might want to consider repaying this before the end of the accounting period. Such balances are required to be disclosed in the accounts and loans outstanding for more than 9 months will be subject to s455 tax, although this is refunded following the accounting period the loan is repaid.
If you are considering or have considered any innovative development within your business and incurred staff costs and software costs please let us know. There are considerable tax advantages in making a research and development claim. Please see our web page for more information. We can put you in touch with various R&D specialists.
Please inform of any future intentions of the business as it may be beneficial to implement any tax planning opportunities before the accounting period ends.
Please contact us if the company is ceasing to trade and we can discuss the options available to you. This also helps us to limit your accountancy by not undertaking any unnecessary work.