Malcolm ZoppiSun Oct 22 2023

How to Change Your Accounting Reference Date and Year End at Companies House

Changing the accounting reference date (ARD) for your company may be necessary for various reasons, such as aligning your accounting year with your business cycle or taking advantage of tax planning opportunities. Whatever the reason may be, it’s important to understand the process and requirements involved in changing your ARD. In this article, we will […]

change accounting reference date

Changing the accounting reference date (ARD) for your company may be necessary for various reasons, such as aligning your accounting year with your business cycle or taking advantage of tax planning opportunities. Whatever the reason may be, it’s important to understand the process and requirements involved in changing your ARD. In this article, we will guide you through the steps to change your ARD, as well as provide an overview of the regulations related to ARD changes set by Companies House and HMRC.

Before we dive into the details, let’s first define what ARD means. The accounting reference date is the end of your company’s financial year, also known as the year-end. This date determines when your accounts must be prepared, filed with Companies House, and used to calculate your corporation tax liability. Typically, the ARD is set to the last day of a month, such as 31 December or 31 March, and the first ARD is chosen by the company’s directors when incorporating the company.

If you need to change your ARD, you must follow the regulations set by Companies House and HMRC. Failure to comply with these regulations may result in penalties, so it’s crucial to understand the process and requirements before making any changes.

Key Takeaways

  • The accounting reference date (ARD) is the end of a company’s financial year.
  • The ARD determines when a company’s accounts must be prepared, filed with Companies House, and used to calculate corporation tax liability.
  • Changing the ARD requires compliance with regulations set by Companies House and HMRC.
  • ARD changes may be necessary for reasons such as aligning the accounting year with business cycles or tax planning opportunities.
  • The first ARD is chosen by the company’s directors when incorporating the company.

Understanding the Accounting Reference Date

The accounting reference date (ARD) is a date that represents the year-end of a company’s financial year. It is also referred to as the company’s accounting period, and it is usually set as the last day of a particular month. For instance, if a company was incorporated on 10th January, the first accounting reference date is the last day of the month that falls 12 months later, i.e., 31st January of the following year.

The Companies House and HMRC require all companies to have an accounting reference date that covers a period of 12 months, with the exception of the company’s first financial year. The first accounts must be made up to the accounting reference date that falls not later than 18 months from the date of incorporation or the company’s first anniversary.

Incidentally, the accounting reference date can be extended, shortened, or changed for other reasons. However, the company must apply for permission from Companies House in advance if they want to deviate from the default period of 12 months, and make the application before the deadline for filing accounts, which is usually nine months after the accounting reference date.

Lengthen accounting periodIf a company wants to lengthen its accounting period, it must have reasons that are considered valid by Companies House, such as aligning the accounting reference date of a subsidiary company with its parent company or accounting for a change in the company’s cycle.
Shorten accounting periodA company can shorten its accounting period for various reasons, such as aligning its accounting reference date with that of a subsidiary company or avoiding the cost of a statutory audit. However, a company cannot shorten its accounting period to less than nine months if the previous accounting period was more than 12 months.
Change the accounting reference dateChanging the accounting reference date is often done to suit the company’s business requirements, such as aligning the accounting reference date with that of a subsidiary company or a change in the company’s year-end. However, unless the company has a valid reason, it can only change the ARD once every five years.

It is also important to note that changing the accounting reference date will affect the company’s accounting period, and it may also affect the date that the company has to file its annual accounts and corporation tax returns with HMRC.

It is essential to keep track of the company’s accounting reference date and ensure that the annual accounts are filed with Companies House and HMRC before the deadline. Failure to file annual accounts and other necessary documents on time can result in penalties and fines.

Conclusion

Understanding the accounting reference date is crucial for any company that wants to comply with the requirements set by Companies House and HMRC. Companies should ensure that they file their annual accounts and other relevant documents before the deadline and seek permission from Companies House if they want to change their accounting reference date, lengthen or shorten their accounting period.

How to Change Your Accounting Reference Date

If you need to change your accounting reference date, there are several steps you should follow to ensure the process is completed successfully.

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Submit Form AA01 to Companies House

The first step in changing your accounting reference date is to submit Form AA01 to Companies House. This form can be completed online or by post and must include the details of the new accounting reference date and the reason for the change. Companies must submit this form within the filing deadline for their annual accounts to Companies House.

Responsibilities of the Company Manager

The company manager is responsible for ensuring that the change in the accounting reference date is valid and that all necessary steps are taken to comply with the regulations set by Companies House and HMRC. It is important to note that a company cannot change its accounting reference date if it has already filed its annual accounts with Companies House or if the change would make the company’s financial year shorter than 12 months.

Considerations for Special Circumstances

If a company is in administration, the administrator will be responsible for completing the Form AA01 to change the accounting reference date. Additionally, the new accounting reference date must be the last day of the month, unless the company is changing its accounting reference date for the first time since incorporation.

Impact on the Company’s Accounting Period

It is important to understand the impact that changing the accounting reference date will have on the company’s accounting period. The new accounting reference date will cover a period of 12 months, unless the company’s first accounting reference date is the day of incorporation or the last day of the month. This may affect the company’s corporation tax return filing date and the period for which the company must prepare its annual accounts.

File Your Accounts According to the New Filing Deadline

When a company changes its accounting reference date, the filing deadline for its annual accounts will also change. The new filing date depends on the date of the new accounting reference date and can be found on the Companies House website. It is essential that the company files its annual accounts with Companies House and HMRC by the new filing date to avoid any penalties or fines.

Using Companies House Online Service

Companies House provides an online service for companies to change their accounting reference date. This service is available to companies that were incorporated in the UK and have filed their current year’s annual accounts. Companies can access this service through their Companies House registered account.

By following these steps, a company can change its accounting reference date with ease and ensure compliance with the regulations set by Companies House and HMRC.

Conclusion

In conclusion, changing your company’s accounting reference date can have significant implications, both for the accounting period and the company’s financial year. It is important to note that you cannot change the accounting reference date to make your company’s financial year shorter or longer than 12 months, or to affect your accounting period. If you change the accounting reference date, it would cover a period of 12 months, either the previous accounting period or the one immediately after.

Additionally, changing the accounting reference date could also impact the anniversary of the last day of your financial period, and the accounts must be set by Companies House accordingly. Every company’s financial year starts on the day after the previous financial year, and in the case of a new company, it starts on the day of incorporation.

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It is essential to note that if your company’s financial year is longer than 12 months, the company must prepare annual accounts with Companies House. Also, every company must file its company tax return within 12 months of the end of the accounting period, so you should ensure that you can meet the filing deadline before you decide to change the accounting reference date.

Ultimately, while it is possible to change the accounting reference date, new companies can only change their accounting reference date once. Companies that have already overdue accounts must file their accounts before they can change the accounting reference date.

In summary, changing the accounting reference date can be a helpful tool in managing a company’s financial affairs. However, it must be done with careful consideration of the rules and regulations set out by Companies House and HMRC. Complying with these rules and regulations, and timely filing of the accounts, is key to ensuring the smooth running of your company’s financial affairs and avoiding any penalties or legal issues.

FAQ

What is the process to change the accounting reference date for a company?

The process involves submitting the necessary form (AA01) to Companies House. The company manager is responsible for ensuring the form is filed correctly. Depending on the circumstances, there may be specific considerations to take into account.

What does the accounting reference date represent?

The accounting reference date signifies the end of a company’s financial year. It is crucial for filing accounts with Companies House and fulfilling obligations related to corporation tax. Companies House and HMRC have set rules and regulations in place regarding the accounting reference date.

How can I change my accounting reference date?

To change your accounting reference date, you need to submit form AA01 to Companies House. The specific day of the month for the new reference date can be chosen, as long as it falls within the same month as the previous date. It is important to understand the impact on your company’s accounting period and ensure accounts are filed accordingly.

What are the implications of changing my company’s accounting reference date?

Changing your company’s accounting reference date can affect your company’s financial year. It may make your financial year shorter or longer, depending on the new date chosen. It is crucial to consider the implications for filing annual accounts with Companies House and preparing the company tax return. Changes must be made in accordance with the regulations set by Companies House and HMRC.

Disclaimer: This document has been prepared for informational purposes only and should not be construed as legal or financial advice. You should always seek independent professional advice and not rely on the content of this document as every individual circumstance is unique. Additionally, this document is not intended to prejudge the legal, financial or tax position of any person.

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Whether you require specialised knowledge for your business or personal affairs, Gaffney Zoppi can support you.