Changing your company year end

There are a number or reasons why you might consider changing your company year end – which will either shorten or lengthen the accounting period.

company year end

A company can shorten its accounting period as many times as it likes – but it can only lengthen it once every five years (or to be more exact, notice can’t be given to extend an accounting period if it is within 5 years of an accounting period which has been extended). So if you’re going to lengthen your accounting period, make sure there’s a valid reason to do so!

Normal company year end

A company’s normal year end is the last day of the month 12 months after the company was incorporated – so if a company is incorporated any time during March 2017 then its year end will be 31st March 2018.

The company’s first set of accounts will be due for filing at Companies House 21 months after the date of incorporation. So in our example above, if the company is incorporated on 21st March 2017 then its 31st March 2018 accounts will be due for filing by 21st December 2018 – ie 21 months after the incorporation date of 21st March 2017.

Going forward the accounts will be due for filing at Companies House 9 months after the year end – adjusted for the month end. So for example if the company’s year was 28th February 2017 then the accounts will be due for filing by 30th November 2017.

However if the company’s year end was 26th February 2017 then the accounts will be due for filing by 26th November 2017.

A company can also choose to file accounts up to a date which is within 7 days of its registered accounting date (before or after). This can be useful for companies which do their bookkeeping weekly e.g. restaurants or bars – although this is becoming less common as modern bookkeeping systems mean that businesses are less likely to do their bookkeeping weekly (take a look at Xero and FreeAgent).

If a company chooses to file accounts up to a date within 7 days of its registered accounting date, the directors do not need to notify Companies House of this change.

Adjusted company year end

First accounting period

A company can change its first accounting period to any length between 6 months and 18 months – which means that a company can choose any year end, no matter when it was incorporated.

If the accounting period is changed then the accounts will be due for filing either 21 months after the incorporation date or 3 months after the new accounting period – whichever is later.

So if a company is set up on 25th March 2017 it will have a normal year end date of 31st March 2018 and its accounts will be due for filing by 25th December 2018.

If it shortens its first accounting period to 31st December 2017 then its accounts will still be due for filing by 25th December 2018 – as this is later than 3 months after the new accounting period (which would be 31st March 2018).

If it lengthens its first accounting period to 30th September 2018 then its accounts will be due for filing by 31st December 2018 – as this is later than 21 months after incorporation (which is 25th December 2018).

Subsequent accounting periods

After the first accounting period, a company can shorten its accounting period to any length and can lengthen its accounting period to up to 18 months (subject to the once every five years rule mentioned above!).

If a subsequent accounting period is lengthened to more than 12 months, then the filing deadline will be 9 months after the accounting date.

So for example, if a company’s year end is 31st March 2018 and it changes this to 30th September 2018, then the accounts won’t be due for filing until 30th June 2019. This gives it an additional 6 months to file its accounts from the original due date of 31st December 2018.

If the accounting period is shortened to less than 12 months, then the filing deadline will be the later of 9 months after the accounting date or 3 months after the change was made. So if a company’s year end is 31st March 2018 and it changes to 31st December 2017 the day before the original filing date of 31st December 2018 (in other words 30th December 2018), then the shortened accounts will be due for filing by 30th March 2019.

How to change a company year end?

When changing the company year end, the first step is to complete the form AA01 (which you can see here) and submit this to Companies House.

However it’s important to note that the accounting date cannot be changed if the accounts are overdue so form AA01 must be received at Companies House within the allowable period for submitting your company’s accounts.

Our eBooks cover this and many other topics.  Check them out here.

And if you'd like to know how we can help you with all of this, or with anything else, feel free to give us a call on 01202 048696 or email us at richard@tfaaccountants.co.uk.

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