Accounting services
Year-end accounts for motor trade businesses
Motor Trade Accounting connects garages, dealers and motor businesses across the UK with accountants who prepare year-end accounts for the trade. Accounts that value your stock properly, meet every deadline and tell you something useful about the year.
More than a filing exercise
Year-end accounts summarise the business's trading for the year and its position on the last day of it: what it owns, what it owes and how much profit it made. For a limited company they are a legal requirement, filed at Companies House and used to work out corporation tax. For a sole trader or partnership they are not published, but they are the basis of the figures on the self assessment return.
In the motor trade the hardest part is usually the balance sheet. Vehicles on the forecourt, parts on the shelves and jobs half finished in the workshop all need a value on the year-end date, and that value feeds straight into profit. Stock is valued at the lower of what it cost and what it can realistically be sold for, so an old car that will only sell at a loss is written down. Stocking finance, customer deposits and money owed by finance companies also need to be shown properly.
A specialist motor trade accountant brings these pieces together, checks them against your records, and explains what the accounts show. The aim is accounts that are filed on time and give you a clear picture of the year, rather than a document you never read.
What year-end accounts work includes
The detail depends on whether you trade as a company, a partnership or a sole trader.
- Statutory accounts for companiesPreparing accounts in the format company law requires for your size of company, ready for the directors to approve and file at Companies House.
- Accounts for sole traders and partnershipsPreparing the profit and loss figures and balance sheet that support your self assessment or partnership return, on the basis that suits the business.
- Stock and work in progressAgreeing a year-end stock count for vehicles and parts, valuing each at the lower of cost and net realisable value, and valuing workshop jobs not yet invoiced.
- Fixed assets and depreciationRecording ramps, diagnostic equipment, tooling, vans and recovery vehicles, and depreciating them on a sensible basis, with capital allowances worked out separately for tax.
- Loans, finance and director's accountsReconciling stocking finance, hire purchase agreements, bank loans and the director's loan account, so the balance sheet agrees with the lenders' own statements.
- Corporation tax computationFor companies, turning the accounts profit into taxable profit and preparing the CT600 return for HMRC.
- A review meetingGoing through the accounts with you, explaining the main movements in the year and anything worth acting on before the next year end.
What to plan before your year end
The work after the year end goes faster when a few things are done on the day itself.
Count your stock
Record every vehicle in stock with its purchase cost, and count parts and consumables. A stock count on or close to the year-end date is far more reliable than one rebuilt months later.
List unfinished jobs
Note every job in the workshop that has been started but not invoiced, with the labour and parts spent on it so far.
Gather loan and finance statements
Ask your bank, stocking finance provider and any hire purchase companies for statements showing the balance on the year-end date.
Note anything unusual
Large one-off purchases, vehicles taken for personal use, disputes with customers or a big debt that may never be paid all affect the accounts. Mention them at the start.
Good to know
Filing deadlines
A private limited company files its accounts at Companies House nine months after its year end, and the CT600 is due twelve months after it. Corporation tax is usually payable nine months and one day after the year end.
First accounts are different
A new company's first accounts are generally due twenty-one months after the date it was incorporated, which often catches new directors out.
Companies House is changing
Directors and people with significant control now need to verify their identity, and accounts filing is moving to software only. Check the current requirements before your next filing.
Late filing penalties
Companies House charges an automatic penalty for late accounts, and it is higher the later they are and if the previous year was also late.
How it works
- 1
Make an enquiry
Let us know how you trade, your year-end date and whether any filings are close or overdue.
- 2
Agree what is needed
A specialist discusses your records, stock and deadlines with you and agrees what they need and when.
- 3
Accounts prepared and reviewed
The accounts are drafted from your records, questions are raised as they come up, and the draft is explained to you.
- 4
Approval and filing
Once you approve them, the accounts and tax return are filed and you are told what tax is due and by when.
Year-end accounts questions
When are my company accounts due?
For a private limited company, accounts are due at Companies House nine months after the end of the financial year. A company's first accounts usually have a longer deadline, generally twenty-one months from incorporation.
How should vehicles in stock be valued at the year end?
At the lower of what each vehicle cost and what it can realistically be sold for, less selling costs. A vehicle likely to sell below cost is written down to that lower value.
Do sole traders need year-end accounts?
Sole traders do not file accounts publicly, but they still need to work out their profit for the year accurately for their self assessment return, and accounts are the clearest way to do it.
Can I change my year-end date?
A company can usually change its accounting reference date by notifying Companies House, within limits on how often and how far it can be extended. It can be worth lining it up with your VAT quarters.
What happens if my accounts are late?
Companies House issues an automatic late filing penalty, and HMRC charges separately for a late corporation tax return. Talking to an accountant early is the best way to limit the damage.
Who prepares the accounts?
Your enquiry goes to a qualified accountant who works with motor trade businesses and prepares year-end accounts for them.
Year end coming up?
Send an enquiry with your year-end date and how you trade, and a specialist will be in touch to agree what is needed.