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.

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.

Disclaimer: The content included in this glossary is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this glossary. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.

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