What Are Annual Accounts?

• Profit and Loss Account: This shows your business’s income, costs, and expenses, providing a clear view of whether you made a profit or loss during the financial year.

• Balance Sheet: A snapshot of your business’s financial position at the end of the financial year, detailing assets, liabilities, and equity.

• Director’s Report: For limited companies, this is a narrative that accompanies the financial statements, summarising the company’s activities and performance.

Why Are Annual Accounts Important?

• Legal Requirement: All companies are required to prepare and submit annual accounts to Companies House and HMRC. Sole traders and partnerships must also prepare annual accounts for tax purposes.

• Financial Insight: Annual accounts help you understand your business’s profitability, financial stability, and areas for improvement.

• Stakeholder Confidence: Investors, banks, and other stakeholders often require annual accounts to assess the financial health of your business.

Key Dates for Annual Accounts

• Company Year-End: This is typically the end of your accounting period, often 12 months after your company was incorporated or the end of the previous financial year.

• 9 Months After Year-End: Limited companies must file their annual accounts with Companies House within nine months after the year-end date.

• 31st January Following the Tax Year: Sole traders and partnerships must submit their annual accounts as part of their self-assessment tax return by this date.