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How to file Final Accounts and Corporation Tax returns through FreeAgent

This article explains how limited company directors can use FreeAgent to file the company’s Final Accounts (FRS 105 micro-entity reports) with Companies House and Corporation Tax (CT600) returns with HMRC as part of its end of year processes.

You will have full access to the features described in this article if you hold the user role of ‘Director’ in FreeAgent and have full (level 8) access to the software. After you finalise your company's End of Year report, you will need to have access to the following information in order to submit your Final Accounts and Corporation Tax return:

We strongly recommend asking an accountant to review your accounts and tax forms before submitting them to Companies House or HMRC through FreeAgent.

If you work with an accountant who is a FreeAgent Partner, your accountant will file your company’s Final Accounts and Corporation Tax returns through FreeAgent on your behalf. As a result, you won’t have access to this functionality in your FreeAgent account.

Unsupported scenarios

FreeAgent can only produce CT600 forms and allow you to file Corporation Tax returns for accounting years ending on or after 27th October 2020. If your accounting period ends before this date, FreeAgent will work out a Corporation Tax projection for you, which you can use when you file your Corporation Tax return directly to HMRC.

Unfortunately, FreeAgent is unable to calculate a company’s Corporation Tax liability accurately in any of the following scenarios:

  • The company is carrying trading losses backwards
  • The company has trading losses prior to 1st April 2017
  • The company has received dividends from other companies
  • The company has made a profit or loss from buying or selling investments
  • The company needs to file for the final period to cessation
  • The company needs to record research and development activity

If your company has donated money to a charity, FreeAgent will calculate its overall tax correctly but will not split the donation out into box 305 on the Corporation Tax return so the content of the CT600 form will be incorrect.

If any of these scenarios apply to your company, you won’t be able to use FreeAgent to file your company’s Corporation Tax return to HMRC. Find out more about the unsupported scenarios.

In addition, FreeAgent does not currently support CT600 filing for companies that are limited by guarantee.

Before you start

There are a few tasks you need to complete in FreeAgent before you can use this feature at the end of your company’s accounting year:

1. Make sure that all the VAT returns that fall within the relevant accounting year have been either filed or marked as filed in FreeAgent.

2. As part of the process of submitting Final Accounts to Companies House, you are required to disclose the average number of employees that the company had over the course of the accounting year. Record this information in FreeAgent by navigating to ‘Accounting’ from the menu at the top of the screen, selecting ‘Reports’ from the drop-down menu and then choosing ‘Final Accounts.’ Select the relevant year from the list and then choose ‘Manage notes and settings’ in the top-right of the Final Accounts report. Enter the required information and select ‘Save changes’ to complete the process. You may also need to enter other notes here but your accountant will be able to advise if any of these are required for your company.

3. When you submit Final Accounts to Companies House you need to file your previous year’s comparative figures along with your current accounting year’s figures. If you started using FreeAgent from your company’s start date, FreeAgent will populate your Final Accounts report with this information automatically.

However, if you started using FreeAgent from your company’s second year (or any subsequent year) of trading, you should enter the previous year’s values in the ‘Manage notes and settings’ area along with the information entered in the previous step. FreeAgent will then add these figures to your Final Accounts report.

Please note that FreeAgent won’t copy these figures over from your opening balances and it won’t copy the figures to the opening balances area. This is because they are two sets of figures that may be for different time periods.

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

5. Finally, you should check that your company’s Corporation Tax reference number is recorded correctly in FreeAgent. To do this, select ‘Settings’ from the drop-down menu in the top-right corner of the screen and choose ‘Company Details’. If the Corporation Tax reference number is incorrect, amend the information in the text box and select ‘Save Changes’ to complete the process.

When you’re ready to begin the process of filing your company’s Final Accounts and Corporation Tax return through FreeAgent, follow the steps outlined below:

1. Finalise your company’s End of Year report

Navigate to the ‘Accounting’ tab at the top of the screen and select ‘End of Year’ from the drop-down menu.

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On this page, you will be able to view your End of Year report, which comprises a set of full accounts, abbreviated accounts (which will be submitted to Companies House) and the CT600 (Corporation Tax return) form. FreeAgent populates these documents automatically using the data that you enter throughout the year.

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If you and your accountant are happy with the information in these documents, select the ‘Approve and sign’ button.

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In the pop-up window, type the name that you want to be displayed on the accounts that will be submitted to Companies House. Tick both declarations and then select ‘Add your signature’ to complete the process.

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A blue message will appear above the report to confirm that your accounts are ready for filing.

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Once you’ve approved and signed your End of Year report, FreeAgent automatically puts a lock on your account to prevent you from making any further changes to your end of year accounts. You can remove this lock at any time by selecting ‘Remove signature’ after you’ve approved and signed the report. Once you’ve done this you can make further adjustments to your figures before filing, but we recommend that you speak to an accountant before doing so.

Please be aware that once either the Final Accounts or the Corporation Tax (CT600) return have been filed, you won’t be able to ‘unlock’ to make amendments. If this happens, you would need to speak to your accountant to find out the best way to make corrections.

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2. Submit Final Accounts to Companies House

Once you have approved and signed your company’s End of Year report, you will see the option to ‘File Final Accounts with Companies House’.

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Review the information, enter your Companies House presenter account details. You can use the details from either a credit account or a standard account with no credit facility. Next, enter your company authentication code and then select ‘Submit Final Accounts’ to complete the process.

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If the submission is successful, you will see a note of the Companies House submission reference number at the top of the screen.

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You’ll also see this number on the right-hand panel of your Final Accounts report.

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3. Submit your company’s Corporation Tax return to HMRC

Once you’ve submitted your company’s Final Accounts report to Companies House, you will see the option to file your company’s Corporation Tax return to HMRC.

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Review the information, enter the company’s Government Gateway credentials and select ‘Submit Corporation Tax Return’ to complete the process. Remember to use your company’s Government Gateway credentials and not your own.

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You’ll see a message confirming that your company’s End of Year accounts are now complete for the relevant accounting year.

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Once you have submitted your company’s Corporation Tax return successfully, an ‘IR mark’ will appear in the ‘Submission receipts’ panel of the return in FreeAgent.

To review the return, navigate to the ‘Taxes’ tab at the top of the screen, select ‘Corporation Tax’ and then choose the relevant Corporation Tax return from the list.

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You’ll find your Companies House submission number and Corporation Tax IR mark from HMRC on the right-hand side of the ‘End of Year’ area.

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What happens next?

When FreeAgent receives responses from HMRC and Companies House in relation to your company’s submissions, the software will automatically send emails to your registered FreeAgent email address to confirm whether the submissions in question were accepted or rejected.

If you would prefer not to receive an email notification for these submissions, you can choose not to receive them by updating your communication preferences. To do this, choose ‘Settings’ from the drop-down menu in the top-right of your account and then select ‘Communication Preferences’. Untick the ‘Filing notifications’ checkbox in the ‘Emails’ area and select ‘Save Changes’ to complete the process.

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