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What does your accountant need to prepare your accounts and tax return?

What does your accountant need to prepare your accounts and tax return?

  • When the tax filing deadline approaches, business owners frantically pack a year of receipts into bags and boxes to drop them off in their accountant's office before they miss the deadline. With this "method", it is likely that your accountant will call you to request additional bank statements, or documents relating to the correct tax year. So, if you are a business owner, here is a breakdown of the documents your accountant will need to file your accounts and personal tax return.

    Account records 

    Your bank statements for all of your professional accounts and for the entire period covering the financial year. You must communicate to your accountant the statements of your main account, but also of your deposit account or reserve account. Also include all check books and payment in pounds if you still use them. Chq 00051 for £ 46.57 is not meaningful and you will need to specify the nature of the financial movement to your accountant.

    Your loan statements. Your accountant will need to know the closing balance on your year-end date. The interest incurred is a tax deductible expense, so if the balance is tedious, it is worth doing.

    Your business credit card statements should also be sent to your accountant. If you occasionally pay business expenses with your personal card, give the statements to the accountant and highlight these expenses.

    Details of the financing agreements concluded during the year. If you have a new lease, you should let your accountant know. Interest on refunds is a tax deductible expense and the asset could fall below the annual investment deduction. Communicating these documents helps reduce your tax bill.

    All your payroll records for the year (if your accountant manages your payroll he will already have these records). You will need a printout of each month's payroll so they can reconcile the net payments made to employees. Make sure your reports show employers' national insurance not listed on payslips.

    All income from your sales. You must provide all of your sales invoices for the year whether or not they have been paid.

    Cash receipts and a note showing the petty cash balance at the end of the year allow your accountant to reconcile your cash flow, which is essential.

    An estimate of the value of your inventory as of March 31.

    If you are trading through a limited company, keep a log of all the business trips you make. Note that business mileage does not apply to commuting to work every day.

    Tax return records

    If you have employment income (outside of your limited liability company) but left it during the year, you must provide your P60 or P45.

    If you had a P11d include that as well, otherwise your tax calculation will be wrong and you might have issues with HMRC.

    Details of private pension payments made.

    Details of all bank interest received during the year (excluding ISA). This is an item on your tax return that HMRC is already familiar with. It is therefore recommended not to forget your savings account.

    Details of any dividends received during the year. 

    Your rental income and property management fees if you receive your net rental through a real estate agent, your mortgage interest, your repayment mortgage, etc.

    Any other income received during the year. This could range from other self-employment that you may have or a billable gain, such as the sale of rental property or shares.

    Your tax return must state all your income, if you have any doubts about the usefulness of a document, it is better to communicate it to your accountant rather than making the decision not to declare it yourself.

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