Certain regulations govern the alteration of a company’s accounting year end date, also known as its ‘accounting reference date’, typically established based on the company’s incorporation date. However, under specific circumstances, changing the accounting year end can offer trading and tax advantages for some businesses.
As a general guideline, adjustments to the year-end can only be made for the current financial year or the preceding one. Altering the year end will also modify the deadline for filing accounts, except for new companies in their initial financial year.
While there’s no restriction on shortening the year end date, extending the period can only occur up to a maximum of 18 months once within a five-year period. In certain circumstances, such as when a company is in administration, the financial year can be extended more frequently.
Requests for changing the accounting reference date can be submitted online, which is the preferred and expedited method, using the Companies House online service, or by completing and mailing the Change of accounting reference date (AA01) form. Notably, adjustments cannot be made to a period for which accounts are overdue.
While there’s no definitive rationale for selecting one date over another, several factors should be considered. Common year end dates often align with either 31 December (coinciding with the calendar year’s end) or 31 March (coinciding with the conclusion of the tax year).
If you would like help with your company accounts, including guidance on year end and tax deadlines, please do get in touch a member of our CB Reid team. We use and support many accounting software packages to help make your company accounting an easier process.