Accounting reference dates are an essential part of Limited Company administration because it affects filing deadline both with Companies House and HMRC.
What is an Accounting Reference Date?
The accounting reference date (or year-end date) for a Limited Company is the end of its accounting period.
Companies House automatically sets this to the end of the month in which a Limited Company is registered.
For example, if a Limited Company is registered on 4 April 2020, it’s accounting reference date will be 30 April each year. Its first accounting period will be more than 12 months, ending 30 April 2021. Subsequent periods will be 12 months long, running from 1 May to 30 April each year.
Changing Accounting Reference Dates
Accounting reference dates can be changed, but there are rules to stick to depending on whether it is being shortened or lengthened.
You cannot change your accounting reference date if accounts are overdue.
Shortening an Accounting Period
You can shorten an accounting period as many times as you like but the minimum you can shorten it by is 1 day.
Lengthening an Accounting Period
Generally speaking, you can only lengthen an accounting period once every 5 years and it must not be more than 18 months.
You can lengthen an accounting period more often than every 5 years if:
- the company is in administration;
- you’re aligning dates with a subsidiary or parent company;
- you have special permission from Companies House.
How to Change Accounting Reference Date
You’ll need to contact HMRC to let them know about any changes to a company year-end. If the company lengthens its accounting period, it will most likely be reporting numbers for more than 12 months so will need to fill out two corporation tax returns.
How to Shorten an Accounting Period to Extend the Filing Deadline
If it is anticipated that accounts will be filed late with Companies House, there is a common trick that can be used to avoid penalties.
B y shortening the accounting reference date by one day, a company can get an additonal 3 months to file their accounts. This is because according to the Companies House rules when there is a change in accounting reference date the filing deadline of a company is extended by 3 months from the date of receipt of the Form AA01.
Here’s an example of how it works:
A company has an accounting reference date of 31 December 2018 and its accounts are due for filing 30 September 2019.
As the filing deadline approaches it becomes clear the 30 September deadline won’t be met, so to avoid penalties the company files an AA01 form to change the accounting year end to 30 December 2019.
By shortening the accounting reference day by 1 day the Company has extended its filing deadline by 3 months.
Accounting reference dates cannot be changed when accounts are overdue.
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