Changing your company year-end
The cut-off date for accounting periods is usually the end of the financial year. However, companies can extend their accounting period by up to nine months. This can be done for several reasons, such as if the company is in the process of selling assets or taking on new debts. Extending the accounting period gives the company more time to prepare its accounts and ensures they are up to date.
A business may reduce its accounting period as much as it likes, but there are rules about increasing it. It can do so only once every 5 years and for up to 18 months.
To change your company’s accounting period, you must:
> Give notice to HM Revenue and Customs (HMRC). You can do this online.
> Change your company’s articles of association if they state when the accounting period should be.
> Inform Companies House of the change. You can do this by filing your annual return.
> include a copy of your last annual accounts – unless you’re exempt from sending them
> have written approval from all shareholders
Subscribe to our channel for the latest updates.
Normal company year-end
The normal year of a company commences on the day after the anniversary of its incorporation or (if it was formed by re-registration) on the day after that on which it was first registered. For example, if a company was incorporated on 1 January 2010, its first financial year would have ended on 31 December 2010.
The company’s next financial year would start on 1 January 2011 and end on 31 December 2011. However, a company may adopt an accounting reference period (ARP) different from its financial year.
The company’s first set of accounts will be due to be filed at Companies House 9 months after the end of its first financial year. Going by the example above, the deadline for filing the company’s first accounts would be 31 September 2011.
However, if a company has an ARP different from its financial year, the deadline for filing accounts at Companies House will be 6 months after the end of the ARP.
Can you extend the accounting period?
As mentioned earlier, a company may shorten its financial year as much as it likes. It can only extend its financial year once every 5 years. However, it is impossible to change the accounting period when the deadline for filing accounts at Companies House has passed.
Find out more
Can I extend my Companies House filing deadline?
Companies House deadlines are statutory and cannot be extended. This is because the information in company accounts gives valuable insights into a company’s financial health. However, if there are extenuating circumstances, such as the company being in administration, or a disaster that destroys the company records, it may be possible to apply for an extension.
If you cannot file your accounts on time, you should contact Companies House as soon as possible. You must explain why you cannot file on time and provide evidence to support your case.
How long can a company accounting period be?
Your accounting period for Corporation Tax can be up to 12 months, but no longer. This is because your tax return must cover 12 months.
You can use the same accounting period for Corporation Tax and Self Assessment, but you don’t have to. For example, if your company’s accounting period ends on 31 March, you could use the same period for Self Assessment. This would mean your Self Assessment tax return would be due on 31.
What are the consequences of not filing accounts on time?
If you do not file your accounts on time, you will be liable for a late filing penalty. The penalty amount depends on the company’s size and how late the accounts are filed.
Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.