Annual Accounts

The annual accounts of a company are the final report on all aspects of business operations. The directors' report will describe what the company does, how it has performed and should allow the reader to get a real feel for what is going on. The balance sheet will list assets and liabilities, while the profit and loss statement details how much money was made or spent over that period. 

Yes, you can. However, care needs to be taken to make sure the disclosure requirements are correct. Often the users of accounts (especially lenders) will want the accounts to be prepared by someone who is completely independent of the company and should no be biased either one way or the other. 

Generally, we need a record of all the receipts and payments from the business, along with the company bank statements to ensure the records are indeed complete. Traditionally of course these were paper-based, but increasingly a link to software such as Xero, FreeAgent, QuickBooks etc is often all we need to make a start.

Every company registered in the UK needs to prepare company accounts - even if they are dormant or not yet trading. A sole trader or partnership on the other hand is not required to submit accounts.

Yes, you can. However, they are a legal document and HMRC do have a legal right to investigate and question them. I would strongly recommend they are prepared by a qualified accountant.

They are prepared for two main reasons. The first is that HMRC needs to know how much tax to expect and collect. The second is that companies need to show a public record of the state of affairs of their company. The reason for this is the company is a separate legal entity to the owner which means that a supplier can work out how much credit to extend, or a customer has an idea of what volume the company can provide. 

No, you do not. However, I strongly believe that one of the most important rules in business is only doing what only you can do and be brilliant at it. That way you are making the very best use of your time, and remember that time is the only resource that we can't buy more of.

The only companies that need to be audited in the UK are those that have 2 out of the 3 of the following; sales over £10.2 million, gross assets over £5.1, or more than 50 employees on average. 

Not necessarily, but do remember a Limited company that is trading MUST have its own bank account in its own name. The tax consequences of not doing this correctly are large and unpleasant. If there is one point on this page to make a note of, then this is that point.

Accounts need to be submitted to companies house within 9 months of the year-end, and to HMRC within 12 months. Helpfully both HMRC and companies house will send reminders to the registered office. Of course, a helpful accountant will make sure they are not missed either!

Eventually, the company will be struck off. At this point in time ALL assets will be transferred to the crown this includes bank balances, property in the company name, vehicles etc. The company can be brought back to life, but this is a lengthy, costly exercise that is easily avoided.

No. A trial balance is merely a list of all the nominal ledger codes. A balance sheet is a snapshot of the business at one specific point in time.

Yes, you certainly can. BUT you run the risk of making mistakes which can result in large penalties from HMRC, or of course making mistakes and paying too much tax - which is of course a penalty in its own way!