Determining Financial Year End for United Kingdom Companies

Determining Financial Year End for UK Companies 3E Accounting provides a quick 101 on determining financial year-end for UK companies.

It is a legal requirement in the UK to file annual returns and do all year-end financial reporting. This ensures that stakeholders have access to precise financial data, and the company itself pays accurate taxes. Hence, it is crucial to get your company’s accounting dates right as missing deadlines can result in unnecessary fines. Determining financial year-end for UK companies complements the accounting cycle and facilitates ease of annual filings, taxation, etc.


Ascertaining Accounting Dates

While the company accountant usually handles financial matters, owners and directors should also understand the process. Directors also have a duty to ensure that proper records and filing of financial statements are done.

Your company’s annual or statutory accounts are prepared at the end of the financial year. Copies of the accounts need to be submitted to both Companies House and HMRC, and they have different deadlines for submission. As such, knowing the financial year of your company is quite essential.

Your business’ financial year is ascertained by determining the first accounting reference date. The first accounting reference date is the duration of time:

  • That begins with the date of incorporation
  • Ends with the accounting reference date
  • Which is between six to 18 months

The accounting reference date is initially set by the Companies House and will be a year later of the last day of the month of incorporation. Hence, if you incorporated your company on the 5th of January 2020, the accounting reference date will cover more than a year as it will end on the 31st of January 2021.

The accounting reference date can be varied or changed by giving notice to the Registrar of a new accounting reference date. Generally, the notice:

  • Must state if the duration of time is to be shortened or lengthened.
  • Cannot be extended for a time frame beyond 18 months.
  • Will not be effective if given less than five years after a previous extension.


Non-concurrent Accounting Timeframes

The financial year is also tied in with the accounting timeframe for Corporation tax and must not be longer than 12 months. This accounting timeframe is provided by HMRC when you register for Corporation Tax and can be checked online at its website. Your business must file a Company Tax Return unless you are a sole trade or partnership, which requires a Self-Assessment Return instead.

A company’s accounting reference date and accounting timeframe do not always run concurrently, as the financial year can be shortened or lengthened. The accounting timeframe is within 12 months, and the accounting reference date can exceed this. In instances when this occurs, you will have to file two returns which will have two payment deadlines. One return will be for the first 12 months and the other for the rest of the time of your first accounting reference date.

In some instances, a company’s incorporation date and the start of actual trading may be months apart. This will also require two tax returns to be filed, one for the dormant time and one for the duration of trading.

For assistance in determining financial year-end for UK companies or collating statutory accounts, Contact 3E Accounting today. Our team of specialists have years of industry experience in accounting standards and other business solutions, including company incorporation.

Determining Financial Year End for UK Companies