What is a year end?
Definition of year end
Year end is the end of a business's accounting year. It's short for 'accounting year end'.
The business prepares its accounts every year to the year end.
It's the end of the tax return as we know it! Find out about HMRC’s Making Tax Digital plan and how it will affect you with our free guide.
At year end, the income and day-to-day running costs are all added up in their categories (for instance, how much the business earned in sales, how much it spent on rent, how much it spent on professional fees, etc).
The running costs are then deducted from the income, to give the business's profit for that year.
The profit, less any Corporation Tax and dividends the business is paying out, is then taken to the balance sheet, because it is a sum that the business's owners theoretically have available to take out of the business (so long as the business has enough cash to spare).
The income and day-to-day running cost categories are thus emptied ready for the new year.
Got questions? Ask Emily!
FreeAgent's Chief Accountant Emily Coltman is available to answer your questions in the comments.