End of Year accounts essentials for accountants

This article explains how FreeAgent’s End of Year accounts functionality works. It also explains how to prepare a client’s End of Year accounts and submit them to Companies House and HMRC.

End of Year accounts

FreeAgent’s End of Year functionality has two components: your client’s Final Accounts report and their Corporation Tax return.

Final Accounts report

The Final Accounts (FRS 105 micro-entity accounts) report in FreeAgent is prepared according to the financial reporting standard for companies that meet HMRC’s definition of a ‘micro-entity’.

The report will display your client’s Income Statement and Balance Sheet figures and will be initially marked as ‘Draft’ until you've added the necessary notes to the accounts to finalise the report.

If your client meets HMRC’s definition of a micro-entity, you can use this report to submit their annual accounts to Companies House and HMRC.

FreeAgent will file a shortened version of your client’s accounts to Companies House. The term ‘Abbreviated’ in FreeAgent refers to ‘shortened accounts’ and is not included in the title of the accounts that are filed with Companies House.

Corporation Tax return

FreeAgent uses the financial data entered throughout the year to populate most of your client’s Corporation Tax return (CT600).

If you need to, you can adjust your client's Corporation Tax liability figures.

If you need to report a year-end debit balance on your client’s director’s loan account to HMRC, you can enable the CT600A supplementary pages.

You might find the following articles useful for dealing with Corporation Tax in FreeAgent:

• How to enter brought forward figures in FreeAgent
• How Corporation Tax is calculated for an accounting year longer than 12 months
• Why is profit split over two financial years?

How to prepare for filing your client’s End of Year accounts in FreeAgent

Before you file your client’s Final Accounts and Corporation Tax (CT600) return for the first time in FreeAgent, make sure that you’ve completed the steps outlined below.

1. Check that FreeAgent supports the type of accounts that you need to file

FreeAgent supports accounts prepared according to the financial reporting standard for active companies limited by shares that meet HMRC’s definition of a ‘micro-entity’ (FRS 105).

Please note that FreeAgent won’t indicate whether your client qualifies to prepare accounts under FRS 105 or not.

2. Check that your client’s accounting dates in FreeAgent are correct

Make sure that your client’s accounting dates in FreeAgent match the dates held at both Companies House and HMRC.

3. Check that your client’s company name and address are correct

Make sure that your client’s company name and address in FreeAgent match those held at both Companies House and HMRC.

4. Apply for a presenter account

In order to file accounts through FreeAgent, you'll need to apply for a presenter account with Companies House. You'll also need to enter the client’s company authentication code issued by Companies House as part of the filing process.

5. Request authority to file Corporation Tax on behalf of the client

You’ll need to request authority to file Corporation Tax on behalf of any new clients directly from your HMRC agent services account.

You might find the following articles useful for preparing to file your client’s End of Year accounts in FreeAgent:

• How to prepare for filing Final Accounts and Corporation Tax returns through FreeAgent
• How to apply for a Companies House presenter account

How to file your client’s End of Year accounts

There are a few tasks you need to complete in a limited company client’s FreeAgent account before you can file their End of Year accounts using FreeAgent.

1. Ensure that all the client’s VAT returns that fall within the company’s relevant accounting year have been either filed or marked as filed in FreeAgent.

2. Add a note in FreeAgent to record the average number of employees that the company had over the course of the accounting year, and any other required notes.

3. If your client started using FreeAgent from their company’s second year (or any subsequent year) of trading, you should also enter the previous year’s values in the ‘Manage notes and settings’ area of their Final Accounts report.

4. Ensure that the CT600A supplementary page is included as part of your client’s Corporation Tax submission if they need to report any year-end debit balances on their loan accounts to HMRC and that a ‘Director Advances Credits Note’ has been added to your client’s Final Accounts report with details of the loan.

5. Make sure that your client’s Corporation Tax return submission is set as the initial submission for the period that you're working on and not an amendment. You can check this by selecting ‘Edit Details’ in the top right corner of the Corporation Tax return and making sure the ‘Are you making an amendment’ option is set to ‘no’.

You can then begin the process of filing the client’s Final Accounts and Corporation Tax return through FreeAgent.

You might find the following articles useful if you receive an error message when filing your client’s End of Year accounts:

• Error codes you might receive when submitting your Final Accounts
• Error codes you might receive when submitting your Corporation Tax return
• Corporation Tax error message: authentication failure

How to make corrections to your client’s End of Year accounts

If you find that there are errors within their accounts after you’ve filed or marked as filed their Final Accounts and/or Corporation Tax return, you can either unlock their End of Year report to make the corrections this year or make the corrections next year.

Find out how to make corrections after filing clients’ End of Year reports.