Year-end checklist for UK small businesses

1. Get the basic records complete

Under UK rules, your accounts and tax returns are based on what actually happened in the year, not just on the money that moved in and out of the bank. The first step is simply making sure that day-to-day records are complete and sensible.

Before your year-end, it helps to check that:

• All sales invoices have been raised and recorded.
• Customer payments are matched to the correct invoices.
• Supplier expenses, receipts, rent expenses and staff costs are posted to the right categories.
• Bank transactions are imported or fed in for the whole year.
• Card accounts and payment processors (for example, PayPal, Stripe, GoCardless) are up to date.
• For landlords: rental schedules reflect all rents due and received, deposits held, and letting agent statements have been entered.

For a limited company this information sits behind your company accounts and corporation tax return. For sole traders, landlords and partnerships it feeds directly into your Self Assessment figures. In all cases, year-end is much easier when the basic records are already in good shape.

2. Make the balances match reality

The year-end is a good time to ask a simple question: do the balances in the software actually match what is happening in real life? If they do not, profit and tax will be unreliable, no matter how neat the reports look.

Practical checks include:

• Reconcile each bank account and business credit cards to the year-end statement.
• Confirm loan and hire purchase balances to lender statements.
• Review customers who owe you money and clear obvious errors or duplicates.
• Check supplier balances so that already-paid or cancelled supplier invoices are not still showing as due.
• For limited companies: review the director's loan account so it reflects real money movements between you and the company. If it is significantly overdrawn, raise it with your accountant as there can be extra corporation tax charges.
• For landlords: make sure rent arrears, service charges and deposits are sensibly recorded, not hidden inside a generic “suspense” or “other debtors” balance.
• For CIS subcontractors: check that CIS tax shown in your records matches your CIS deduction statements, so any reclaim on your tax return is correct.

Once these balances match reality, your accountant can spend more time advising you and less time fixing basic bookkeeping problems.

3. Review equipment, vehicles and other assets

Items such as computers, tools, machinery, office furniture and vehicles usually give benefit over several years rather than just on the day you buy them. Accounts and tax calculations should reflect this by spreading the cost over time and, where allowed, giving tax relief on those costs.

A short year-end review usually covers:

• Listing the main assets the business still owns and actively uses.
• Identifying assets that have been sold, scrapped or are no longer in regular use.
• Checking that any new significant purchases have been treated as assets rather than ordinary expenses, where appropriate.
• For landlords: separating day-to-day repairs (for example, fixing a boiler) from major improvements (for example, new kitchen or extension), as they are often treated differently for tax and future capital gains.

Keeping the asset list realistic avoids profits being quietly distorted and makes it easier for your accountant to apply the right tax treatment to different types of spend.

4. Use credit notes and write-offs properly

Credit notes are one of the simplest ways to correct income that turned out to be too high, or to adjust for returns and cancellations. They are especially important in the UK because they affect both your accounts and, in many cases, your VAT position.

Common situations include:

• Overcharging a customer and agreeing to reduce the bill.
• Customers returning goods or cancelling part of the work.
• Invoices raised to the wrong customer or for the wrong property.
• Landlords adjusting overcharged rent or service charges.

Instead of quietly changing or deleting old invoices, it is usually better to issue a credit note so there is a clear trail. Your software and your VAT returns then reflect what was originally billed and what was later reduced. At year-end, this helps make sure that turnover, debtors and VAT all match what really happened.

In some cases you will not expect to be paid at all, even after issuing reminders. At that point, you can discuss with your accountant whether to write off the balance as a bad debt and how that should be recorded.

5. Check VAT, payroll and CIS against your records

HMRC sees your business through the returns you submit: VAT, payroll, CIS and Self Assessment or corporation tax. The figures in your accounts should line up with those returns. If they do not, it can cause delays, questions or the need to amend older submissions.

Before finalising the year, it is worth checking that:

• VAT returns submitted under Making Tax Digital agree to the VAT balance in your software.
• Payroll totals reported through RTI match the wages and PAYE figures in your books.
• Any benefits in kind (for example, medical cover or company cars) have been identified for P11D reporting if needed.
• CIS returns and CIS deduction statements agree to what is recorded for CIS income and CIS suffered.
• Any payment plans or outstanding amounts with HMRC are noted and easy to explain.

For companies this supports accurate company accounts and the corporation tax return. For sole traders and landlords it helps your Self Assessment figures line up with VAT, payroll and CIS history.

6. Provide the documents your accountant will expect

Even with tidy bookkeeping, your accountant will still need original documents and summaries to check balances and support the figures that go to HMRC and Companies House.

The most useful documents to provide at the start are usually:

• Bank statements at the year-end date for each business account.
• Loan, lease and hire purchase statements showing closing balances and interest.
• Payroll year-end reports and information for P60s and P11Ds if relevant.
• CIS deduction statements for subcontractors, and CIS returns for contractors.
• Rental statements, mortgage interest summaries and service charge breakdowns for landlords.
• Short explanations of any one-off grants, major contracts or unusual items.

Supplying these upfront allows your accountant to move through the year-end work in a straight line instead of stopping to ask for extra information several times.

How Greater London Bookkeepers can help?

For many businesses, year-end feels difficult not because the rules are complicated, but because a full year's worth of work has been pushed into the last few weeks. A simple monthly routine (e.g. reconciled bank accounts, sensible balances, timely credit notes and basic checks on VAT, payroll and CIS) turns year-end into a review, not a rescue job.

Greater London Bookkeepers (UK) Ltd works with UK businesses that want clear monthly information, well kept records and a predictable year-end.

If you would like to improve how your bookkeeping supports your accountant, you can outline your situation on our contact page.