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

 

 

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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.

 

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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.

1 Prepare

You will never like that feeling of sudden rush and paranoia as you realise how days run faster than before. So, there you are, and voila! It’s time to prepare your year-end accounts. And they are going to haunt you up to the last minute. As we all know businesses in the UK are required to submit year-end accounts and everyone should comply. So, if you are planning to go on this smoothly, here are the 7 tips to prepare your year-end accounts for 2022.

If you want to approach the end of the year with sufficient resources and necessary tactics to overcome future challenges, preparation not only for you but for your team and the business is a must. No one wants to go to war unprepared. Be prepared for at least a few months before tightening your expenses and catching up on your P.O.s and invoices. Ensure that your records are all processed and put through the system.

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2 Get Your Accounts Up-to-Date

List down all the figures that have been spent on and the unpaid balance from the debtors and all other financial records necessary. You’ve got to track the important figures such as the bills, invoices, and bank statements.

3 Keep Your Employee Data Accurate

Always secure accurate data of your employees and the expenses they have made during the year-end. The HMRC always checks the payroll and the expenditures to make sure that everything is synchronized when getting audited. If there are discrepancies found in the records, then your employee shall be held questionable and it will be difficult to trace back where it started. Double check their submitted expenditure reports before the year ends.

4 Organise Your Space

You get things done easily when you are surrounded by clarity and clutter-free. Segregate your files in order. Make a different partition for different paper files like receipts, invoices, and other files. This is not just about your office space but you can declutter and organise your space on your computer. If necessary, you can download apps to clear up the expense management process. This way, you can access the details easily when you are queried on any part of the accounts you are working on.

5 – Check Your Chart of Accounts

Check your Profit-and-Loss Report that is a part of your Balance Sheet. At the end of the year, the COA (Charts of Account) identifies and controls which accounts should be cleared down. So, you need to double-check and ensure everything is correct and updated.

6 – Check Your Data and Create a Backup

You can survive any catastrophic events only if you have a contingency plan. You’ve got to have plenty of options and backup plans if all other plans don’t work. This applies to year-end accounts too. For instance, by having an ERP system such as Dynamics GP, then you can back your financial data up. There will be no worries even when things go awry since you have a backup file.

7 – Don’t Panic

Everything is stressful during the year-end since all establishments are heading towards a new year. It is not shameful to admit that everyone gets much pressure and a high level of stress every year-and. So, if you are feeling that pressure and rush right now, just take a deep breath, declutter your mind, take things slowly at first, and organise your thoughts in the first place. Whenever you encounter problems whilst preparing your report, take a step back and evaluate everything and then resolve it.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Does a sole trader need a company registration number?

No. Some sole traders believe they need to register with Companies House but a sole trader business is not a corporation and therefore doesn’t require a company number. The business and the owner are one in the same, so no registration number is required.

Do self-employed need to register with Companies House?

Sole traders need to register with HMRC and fill out an annual Self Assessment tax return. A sole trader does not need to register with Companies House unless they become a limited liability partnership (LLP), a limited company, or a corporation, in which case you need to register with Companies House.

Do sole traders have a company registration number UK?

Only businesses registered or incorporated at Companies House require a company registration number. This includes limited liability partnerships and limited companies. Sole traders do not need a company registration number because they are not a corporation, a limited liability partnerships or a limited company.

Do I need a UTR number as a sole trader?

All sole trader that fill out an annual Self Assessment tax return, and register with the government, will be given a Unique Taxpayers Reference (UTR) number. All sole traders need this UTR number to be able to pay their annual tax bill.

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Is sole trader a business?

A sole trader is a sole proprietorship meaning it is a simplified business structure in which one individual owns and is in charge of everything. Unlike a corporation, a limited liability partnership, or a limited company, a sole trader is liable for all losses incurred but is also the lone recipient of any profits.

How much can a sole trader earn before paying tax UK?

Each sole trader is entitled to a personal allowance equal to £12,570 tax free for the 2021/22 tax year. This allowance is the same for sole traders and for those employed through P.A.Y.E.

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Do sole traders have a certificate of incorporation?

Sole traders are sole proprietorships. Unlike a limited company, a limited liability partnership, or a corporation, when you start up as a sole trader there is no need for a company number or a certificate of incorporation.

How long can you run a business before registering?

After you start trading, you should consider registering at least six months before the next tax year which begins in April. However, there’s no law regarding how much time you take before registering.

Do you need a business bank account as a sole trader?

There’s no law requiring sole traders to have a business bank account. A sole trader may use their personal banking or set up a second personal account to separate business and personal use. Business bank accounts are not required.

How much does it cost to register as a sole trader UK?

A sole trader does not need to register. The only cost to register applies when forming a limited company, limited liability partnerships or corporations. There is no cost to register as a sole trader.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.