A Company is required by the HMRC and the Companies House to produce accurate Annual Accounts which consists of various elements: Director’s Report, Profit and Loss Statement and of the Balance Sheet or Statement of Financial Position.
The document tells a story of what happened in course of the year in terms of financial transactions which are summarized in the Profit and Loss Account and show the picture of the business. The Reports provide information on the state of health of the company.
It is from this information that the Government determine how much does the company have to pay in taxes. Generally the more profitable a business is the higher the tax that becomes due to the Government.
We however do not produce the accounts for the Government requirement purpose only but to help us as the mangers and shareholders to know how we have done and the financial state and position of the business and make corrective measures before the business is dysfunctional through losses.
After the end of its financial year, your private limited company must prepare:
- full (‘statutory’) Annual Accounts
- A Company Tax Retrun
You need your accounts and tax return to meet deadlines for filing with Companies House and HM Revenue and Customs (HMRC).