End of Financial Year

Every business has an end-of-financial-year. This article will look at the different dates, the HMRC tax year, important deadline dates for self-employed people, and how to complete end-of-year accounting.

If you are a limited company, your business’s dates for the financial year may vary. This date is set when you register your company at Companies House. You must prepare and submit annual financial reports at the end of the financial year. You also have to submit a company tax return. The accounting reference date marks the end of your company’s financial year and is usually based on your company’s incorporation date.

Introduction to the Fiscal Year

The government’s Fiscal year for tax purposes in the UK is different from the calendar year. It starts on 6 April and ends on 5 April, a period of 12 months. It runs over two different years; it is written, for example, as 2025/26.

One of the things that has always puzzled me is why use 5th April as the end date.

It is set according to the Gregorian calendar, which has remained a standard for a long time. This calendar has been in use since 1752 and is recognised worldwide. The old British calendar started on 25 March, but when the Gregorian calendar was introduced, it was 11 days behind the rest of Europe. 11 days were therefore added to 25 March, and the new tax year system was started.

UK Tax Year Dates

As we have already stated, the UK tax year starts on April 6th and ends on April 5th of the following calendar year. But what does that mean for businesses?

There are certain documents and payments that an employer must file for each tax year; these include:

• 31st May, provide a P60
• 6th July filing deadline for the expenses and benefits forms, including P11D(b), P9D and P11D
• 22nd July Class 1a NIC and PAYE due (electronic payment)
• PAYE is due on the 22nd of each month if paid electronically or on the 19th by cheque.

Adhering to these tax deadlines is essential to avoid penalties. Any late payment or form submission may result in interest and a late payment fee.

If your business uses a payroll service, this should all be included in the price.

Self-Assessment Tax Return Dates

There are a few important dates for the self-employed, or if you need to complete a self-assessment tax return. The last day to submit your self-assessment tax return is crucial to avoid penalties and ensure compliance with legal requirements.

Making Tax Digital (MTD) for the Self-Employed

Making Tax Digital (MTD) is a government initiative to modernise the tax system by requiring businesses and self-employed individuals to keep digital records and submit their tax information online. For the self-employed, MTD aims to simplify tax reporting and improve accuracy.

Key Dates for MTD Self-Assessment Tax Quarters and Returns

Under MTD, the tax year is divided into four quarters. Self-employed individuals must submit a quarterly update of their income and expenses, followed by an annual final declaration.

Key dates for starting MTD are:

From April 2026, all self-employed individuals with income over £50,000 for the tax year 24/25

From April 2027, all self-employed individuals with income over £30,000 for the tax year 24/25

The quarters and their deadlines are:

• Quarter 1: 6 April to 5 July — quarterly update due by 7 September
• Quarter 2: 6 July to 5 October — quarterly update due by 7 December
• Quarter 3: 6 October to 5 January — quarterly update due by 7 March
• Quarter 4: 6 January to 5 April — quarterly update due by 7 June

After the final quarter, you must submit an annual declaration summarising your taxable income, expenses, and any adjustments made during the financial year.

Under MTD, you must use suitable software to submit self-assessment tax returns from April 2026. We have reviewed the best accounting software for the self-employed.

Tax Year-end Date – 5th April

The UK tax year runs from 6 April to 5 April. These are the dates for which the accounts are prepared.

Registration – 5th October

This is the last date on which you can register for self-assessment.

Online Tax Returns – 31st January

All electronic self-assessment returns are due by 31 January. You can submit them electronically using the Government Gateway, accounting software, or an accountant.

Payment dates – 31st January and 31st July

There are two payment dates: 31st January for any tax you owe (balancing payment) and the first payment on account, and 31st July for the second payment on account.

Payments on account are advanced payments towards your tax. You must make advanced payments if your tax bill is over £1000.

Limited Company Year-End

If you are a Limited company, your financial period will differ from the UK tax year. The end dates of any limited company can be found in the Companies House, along with all the filed reports.

Below is an example of a Limited registered business. It shows the business was registered on 31st March 2018, and their year-end is 1st April to 31st March. Statutory accounts are due 9 months after the year-end. Paying Corporation Tax by the deadline is essential to avoid penalties and ensure proper financial management.

Some companies will have their financial year the same as the calendar year, ending 31st December.

Corporation Tax

Limited companies must pay corporation tax on any profits. Corporation tax is due nine months and one day after the end of the year.

Regulatory Compliance

Regulatory compliance is critical to a company’s financial year, as it must adhere to various tax laws and regulations. The company must file its tax return, pay corporation tax, and comply with other regulatory requirements, such as filing annual accounts with Companies House. Ensuring that the correct amount of tax is paid, including income tax, national insurance contributions, and value-added tax (VAT), is essential.

Failure to comply with regulatory requirements can result in penalties, fines, and interest charges. Therefore, staying informed about regulatory changes and maintaining accurate financial records is vital for avoiding costly mistakes and ensuring smooth business operations.

End of Financial Year – tasks

One of the busiest times for any small business is at the financial year-end, and it is crucial to plan to ensure the accounts are complete. Proactive preparation for the end of the financial year can help business owners navigate deadlines and avoid penalties. If you complete the accounts regularly, this will make it easier.

Managing finances effectively is essential to avoid unnecessary costs, both in terms of time and money, particularly during critical periods like Payroll Year End.

Below is a checklist including some of the tasks:

• Ensure that the bank account balances with the bank statements. This is called bank reconciliation. It ensures that all the transactions are posted.
• Depreciation – If you own assets, post a journal entry in the accounts for depreciation. It allows the assets to be reduced over time.
• Stock Take – If you keep stock, completing a stock take will ensure that the stock is present and valued at the correct cost.
• Prepayments – These can be complicated, but they ensure all income and costs are in the correct financial year. An example of a prepayment is that insurance is paid in advance for the whole year, but only 6 months relate to the financial year. A journal is therefore created between insurance and prepayments.
• Accruals – Any amounts from suppliers you have not yet received a bill for must be adjusted with an accrual.
• Check that Debtors and Creditors are correct. It is a good time to check that there are no bad debts and also check supplier statements to ensure all transactions are included. Ensure that all customers receive invoices so that the revenue is correct.
• Remove all personal payments from the accounts. It is better to have a separate bank account.
• Print out a trial balance; it shows all the account codes from both the balance sheet and the profit and loss account. This is an excellent report to see all the figures in one place.

End of Financial Year – Important Dates

 One of the most essential things is producing the required reports, which are known as management reports. The easiest way to obtain the reports is by using accounting software. We recommend Xero, FreshBooks, or QuickBooks. There are also free software packages, including FreeAgent. As the new financial year begins, it is crucial to be aware of the latest tax rates and rules that come into effect.

The reports include:

Balance Sheet Report

A balance sheet is a snapshot of the company’s finances. It includes assets, liabilities and equity.

Profit and Loss or Income Statement

The profit and Loss statement shows all revenue, cost of goods sold, expenditures, and whether the company has made a profit or loss.

Cash Flow Forecast

Not all businesses will produce this report, but it looks at the cash in and out for the following year. This report enables planning for the future and perhaps new investments.

Statutory Accounts

These are required by Limited companies and filed 9 months after the end of the financial year.

Accountants usually prepare statutory accounts, as they must meet specific standards. In the UK, this is the Generally Accepted Accounting Practice.

The accounts must include a balance sheet, profit and Loss and notes about the accounts. Accurate financial records are crucial for tax reporting, ensuring that tax returns are completed accurately. Depending on the size of the company, it may also include directors and auditors reports.

Planning and Preparation

Planning and preparation are essential for a company’s financial year, as it must ensure that it is meeting its tax obligations and filing its tax returns on time. Accurate record-keeping of financial transactions, including income, expenses, and tax payments, is crucial. Companies should also take advantage of all available tax reliefs and allowances, such as pension contributions and charitable donations, to reduce their tax liability. The financial year determines the company’s taxable profit, subject to corporation tax. By planning and preparing thoroughly, companies can optimise their tax position and ensure compliance with tax regulations.

Financial Planning

Financial planning is a critical aspect of a company’s financial year, as it must manage its finances effectively. Preparing a budget, forecasting income and expenses, and ensuring sufficient funds to meet tax obligations are key components of financial planning. Companies must also consider their cash flow to ensure they have enough funds to meet financial obligations, including tax payments. The financial year determines financial statements, such as the balance sheet and profit and loss account, which are essential for assessing financial performance and position. By understanding the financial year and its implications, businesses and individuals can ensure they meet their tax obligations and manage their finances effectively.

Conclusion for End of Financial Year

Understanding the financial year’s end is essential for businesses and individuals. It marks when accounts are finalised, taxes are calculated, and crucial financial reports are prepared. Knowing the key dates, such as the UK tax year from April 6th to April 5th, helps ensure you meet deadlines and avoid penalties.

Whether you are self-employed, run a limited company, or manage business finances, planning and staying organised throughout the financial year will make end-of-year tasks much smoother. By keeping accurate records and understanding your financial year, you can manage your tax obligations confidently and set your business up for success in the new financial year.