Does My Accounting Period Have to be My Incorporation Date? Or Can I Change My Accounting Period to Fit My Natural Business Cycle?
If you’re planning to register a company, you might be wondering when your year-end date is. Also, you might be questioning yourself when it should be. If you have just completed setting up a limited company, you need to understand everything around the accounting period.
From whether your accounting period has to be your incorporation date to whether you can change it to fit your natural business cycle, this article explores the flexibility your business has in terms of determining its incorporation date as the starting point.
You’ll learn the process, potential changes, and benefits, as well as legal and regulatory considerations. Let’s go through the following detailed sections to learn more.
What is My Company Accounting Period?
Also known as accounting reference date, your company’s accounting period is set when you incorporate a new business with the concerned authorities. The end of your business’s financial 12-month period is known as the company’s ' year-end."
Generally, the year-end is established as the anniversary of the last day of the month after your company’s incorporation. It’s a vital date as it commands when your business accounts, as well as a confirmation statement, are due. The Companies House automatically sets your company’s financial year date.
Also known as statutory accounts, business accounts are your company’s financial records that need to be submitted to the HMRC and Companies House every year. They include:
- Profit and loss data
- Notes about the accounts
- Balance sheet
You must file your first accounts twenty-one months after incorporating the business and, in subsequent years, nine months after the end of the financial year.
Does My Accounting Period Have to Be My Incorporation Date?
Your accounting period doesn’t necessarily need to be your incorporation date. While it’s set automatically as the anniversary of the last day of the month when you incorporated your business and will be the same each year, you can ask Companies House to lengthen or shorten your accounting period.
If your request is successful, the accounting period will change as a direct outcome. You can always find your company’s accounting period via the Companies House service if you’ve forgotten or don’t know it.
Can I Change My Accounting Period to Fit My Natural Business Cycle?
It’s possible to change your accounting period to blend smoothly with your natural business cycle. You can make it longer or shorter than twelve months. To do that, you need to apply to Companies House by completing form AA01 and submitting it. You can request these changes either online or complete the form on paper and deliver it by post.
Alterations to your account period will affect your accounting reference date as well as your deadline for filing yearly accounts with Companies House. Also, it may affect the accounting period for Corporation taxes.
If you aren’t sure how to change your accounting period and need assistance, keep in touch with an expert or top-rated agency to help you. A professional will ensure you meet all legal requirements and regulations.