Change of ARD

Change of ARD

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To settle a debate in the office:

Company with previous ARD of 30 Sep changes ARD to 29 Sep (wef 29 Sep 13). It may if it chooses make up accounts to 29 Sep 13 (as shown on the accounts). No problem there. However, can it continue to prepare accounts (and show them as such) to 30 Sep 13?

My reading of the legislation is that accounts are to be prepared for a financial year and a financial year for this purpose is defined as the period ending on the ARD or on such other date within 7 days either side as the directors choose. So in this case the directors could choose to have the financial year ending on 30 Sep 13 and make accounts up to that date, with that date shown on the accounts. However, the opposing argument is that no matter what the financial year end the accounts must show the ARD. But this would result in, for example, the accounts being stated as being for the period ended 29 Sep 13 but reflecting transactions to 30 Sep 13, ie the narrative on the accounts would, as a matter of fact, be wrong. Which is why I believe that it is more correct to state on the accounts the actual financial year end as chosen by the directors.

Replies (12)

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Portia profile image
By Portia Nina Levin
11th Sep 2014 10:24

Cockwaffle

The "alternative view" is complete cockwaffle.

A corporation tax accounting period generally ends after twelve months or on an earlier "accounting date" of a company.

You would have thought that "accounting date" would be defined, would you not?

Guess what? It frigging well is! CTA 2010, section 1119 gives a defnition, and it is easy to find, being the first definition in the section.

It is the date that the company makes its accounts up to. That is the actual date it makes its accounts up to; not some notional date by reference to which it can choose exactly what date it can actually make its accounts up to.

Who would have thunk!

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Euan's picture
By Euan MacLennan
11th Sep 2014 10:27

Yes

If the ARD was shortened by a day, perhaps to get a 3 month filing extension, you can continue to prepare accounts to 30 September under s.390(3)(b) CA 2006 and if you do so, then obviously you state 30 September as the date on the accounts.  There is no basis for your "opposing argument".

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By Ruddles
11th Sep 2014 10:33

Thanks to both

That now puts me in the majority!

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By TerryD
11th Sep 2014 10:39

I believe that your first reading is correct. With an ARD of 30 September you can prepare your accounts at any date up to 7 days either side, and this is normally the date shown on the accounts, although I don't think that there is a legal requirement to state the actual date as opposed to the ARD. This is common practice in the retail sector where they account in weeks are the accounts are made up to the last Saturday in the year (or the first one in the next). I think, for CT purposes, you can elect to have this treated as one accounting period. By the way, given this scenario, what on earth is the point of changing from 30 Sept to 29 Sept?

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By johngroganjga
11th Sep 2014 10:42

This is not difficult is it. 

This is not difficult is it.  The part of a set of accounts which explains what period they cover should say that the period they cover is the one that they do in fact cover.

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Replying to jcace:
Portia profile image
By Portia Nina Levin
11th Sep 2014 10:46

Oooh!

johngroganjga wrote:

This is not difficult is it.  The part of a set of accounts which explains what period they cover should say that the period they cover is the one that they do in fact cover.

You are so masterful!

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By Ruddles
11th Sep 2014 10:45

TerryD

Read Euan's post above!

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By johngroganjga
11th Sep 2014 11:02

This is a question about accounts.  I don't understand the repeated references to CT accounting periods. which are nothing to do with the answer to the question.

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By TerryD
11th Sep 2014 11:10

@Ruddles

Yes - I should've thought of that. Euan's reply appeared while I was still typing - my one finger doesn't move as fast as it used to (be quiet Portia).

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Portia profile image
By Portia Nina Levin
11th Sep 2014 11:10

Do not be silly John

Everything is about tax.

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By johngroganjga
11th Sep 2014 11:27

Some people like to think it is - like HMRC and (for obvious reasons) professional tax specialists but in the real world it isn't.

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