CHECKLIST
Year-End Checklist for Trades
About two hours, and a third of it has to happen before the date rather than after it. Most year-end guidance is written for a business that invoices what it does in the month it does it, which construction does not.
- Six sections, twenty-one checks, two hours
- Work in progress and retention, which general lists miss
- The CIS line that turns a profit into a loss on paper
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Who this checklist is for
Builders and subcontractors approaching a year end who want the decisions made while they are still available, rather than reported on afterwards.
You finish jobs across the year-end date
The costs land in one year and the income in the next. A builder who finishes a large job three weeks after the date shows a loss this year and a windfall next, and neither figure is true. Work done and not yet invoiced is an asset, and leaving it out understates both the profit and the business.
You have retention held on contracts that are finished
It is money you have earned and not been paid, so it is a debtor at the year end rather than something that appears when it arrives. Anything more than two years old is worth a decision: chase it, or write it off and take the deduction this year.
Your accounts show a loss and the year felt fine
CIS suffered is tax paid on account, not an expense. Through the profit and loss it understates your profit by the whole amount, and then you claim the same money again as a credit. On a typical set of figures that turns £21,600 of profit into a £3,960 loss on paper.
FACTS
Why a third of it has to happen first
Capital purchases, pension contributions, a director’s loan account and any debt you are writing off all stop being available the moment the date passes. A van bought the day before the year end gets its relief a full year earlier than one bought the day after.
21 checks
Six sections
2 hours
A third of it before the date
FACTS
The two debtors construction forgets
Work certified but unpaid is a debtor. Work done and not yet certified is work in progress. They are taxed at different times and most trades record neither, which is how a profitable year looks terrible and the next one looks implausible.