Changing your company's year end

Brian looks at how and why you would change your company's year end date. 

There is no straight answer to 'what's the best year end to have' as it depends from company to company. But I have outlined some scenarios where you would consider a change; 

  • The main reason for changing your year end is for the purpose of cash-flow and to defer paying corporation tax - Due 9 months and 1 day following a year end, corporation tax could be delayed by extending your year end.

  • Or in the opposite scenario, you could decide to shorten your year end if you have a rise in profits, and balance out the CT payments.

  • By extending a year end, you could delay a deadline for submitting accounts at companies house. Its currently £150 fine penalty for lateness rising to £1,500 for more than 6 months late!

  • To align it to the tax year. By changing it to the end of March, it will make admin easier and also predict any personal tax due. 

  • If a company is in a Group a change could be made to align your companies to the same year end for the purpose of reducing admin. 

 

How often can you switch your company year end?

  1. You can shorten your year end as many times as you like,.even by 1 day. In the first year, there must be a minimum of 6 months in the accounting period.
  2. You can lengthen your company year end to 18 months, (or more if co. in administration) but a company may only do this once in every 5 years.
  3. But be aware, you can only change a company's year end at any time before the 'current accounting year end's' deadline.

Contact Brian on 0845 303 1144 if you wish to discuss your options for changing your year end date. 

          Post by Brian

         Post by Brian

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