Shortening an Accounting Reference Date

Shortening an Accounting Reference Date

Didn't find your answer?

If I want to shorten a company's Accounting Reference Date, the wording on Companies House website is quite specific:

"You can't change your company's year end when its accounts are overdue"

My client's ARD is 31st December, so the accounts to 31st December 2014 need to be filed by 30th September 2015; i.e. not overdue. Can I shorten the ARD to 31st October? This would make the accounts to 31st October 2014 overdue but would not contravene Companies House condition above.

Presumably if it was allowable, the HMRC filing deadline for the CT Return would also be shortened.

Many thanks.

Replies (19)

Please login or register to join the discussion.

avatar
By stephenkendrew
01st Sep 2015 10:24

I presume you mean 30 September 2015

If you shorten the accounts to 31 October 2014, then the submission date to avoid any penalty is 3 months from when the form was submitted.

What Companies House are saying that you cannot alter the 31 December 2014 yea end after 30 September 2015, since the December accounts will then be late. 

If the filing date at Companies House is extended beyond the normal filing date then the deadline for submitting the accounts to HMRC is also extended.

If, for example you shorten the 31 December 2014 year to 31 October 2014 today (1 September 2015) then, to avoid any penalties, the 31 October 2014 accounts need to be submitted by 1 December 2015 (3 months after 1 September 2015). The company's accounts and tax return for the period ended 31 October 2014 will need to be submitted to HMRC by 1 December 2015.

Interest will, of course, be charged on any late payment of tax (31 October 2014 year-end means the tax was due on 1 August 2015) but here will be no penalty.

Thanks (1)
By Charlie Carne
01st Sep 2015 11:32

I beg to differ

Stephen Kendrew is correct that shortening the ARD from 31/12/14 to 31/10/14 today means that the fling deadline at Companies House will be the later of (i) 9 months after the new ARD (31/7/15) and (ii) three months after the date of change (1/12/15), so the new filing deadline at Companies House will be 1/12/15.

However, HMRC will need accounts to be filed within 12 months after the period of account ends; i.e. by 31/10/15. It is not correct that "If the filing date at Companies House is extended beyond the normal filing date then the deadline for submitting the accounts to HMRC is also extended".

Thanks (1)
Universe
By SteveOH
01st Sep 2015 11:42

Is it 2015 already :)

Thank you for your reply, Stephen Kendrew. I've just edited my post to show 30th September 2015.

I've seen that trick mentioned here on AWeb before about shortening the ARD by one day but what you are saying is that, whatever date I shorten it to, I still have 3 months from the filing of the form. (in your example above, 1st December 2015). If that's the case then that is a bonus.

As far as HMRC is concerned, I get that the deadline for payment of tax would then be 1st August 2015 (but company has tax losses, so no tax to pay) but are you saying that the deadline for filing the accounts and CT Return would then also be 1st December 2015 (in your example above) and not 31st October 2015 (12 months after the financial period ending 31st October 2014)?

Many thanks

Thanks (0)
Universe
By SteveOH
01st Sep 2015 11:57

Thanks Charlie Carne

That does make a bit more sense. Thank you both for your help.

Thanks (0)
Out of my mind
By runningmate
01st Sep 2015 15:21

Still law?

Is Para 19 Sch 18 FA 1998 still law?

RM

Thanks (0)
Portia profile image
By Portia Nina Levin
01st Sep 2015 15:47

Yes

It was amended in 2008, but it says:

"19 A company is not liable to a penalty under paragraph 17 (flat rate penalty) if–

(a) the period for which the return is required is one for which the company is required to deliver accounts under the Companies Act 2006, and

(b) the return is delivered no later than the last day for the delivery of those accounts to the registrar of companies."

But that is a different thing from extending the filing deadline.

Thanks (0)
avatar
By petestar1969
02nd Sep 2015 12:36

Hmm

In my experience the change by one day plan to get more time to file only works if you change it by one day then a couple of days later change it back.

 

I had a client come to me in mid-June asking me to do his 30 September 2014 accounts.

Took a week to get info out of the incumbent so he would have been late (was also late the previous year).

26 June I changed the year end to 1 October 2014 and on 29 June changed it back and got until 29 September to file.

 

Wasn't aware of what Stephen Kendrew has mentioned, interesting though. I might just set up a company myself and try it... :)

Thanks (0)
avatar
By Wanderer
02nd Sep 2015 12:42

@petestar

Your mistake was EXTENDING the date 30/09 -> 01/10 to start with. There was no need for this.

All you needed to do was SHORTEN it 30/09 -> 29/09.

 

Thanks (1)
Portia profile image
By Portia Nina Levin
02nd Sep 2015 12:54

@Wanderer

I believe that petestar is also unaware that you can continue to actually prepare accounts to 30/09 with an ARD of 29/09, by virtue of the fact that it is permitted to actually prepare accounts to a date up to 7 days either side of the ARD.

They may also be unaware that a company can only apply to extend its ARP once every five years, except in specific circumstances.

Thanks (1)
RLI
By lionofludesch
02nd Sep 2015 13:04

Lengthen

@petestar - Now you can't extend the period for 5 years - without a good excuse.

 

Incidentally, I've never tried it - just in case I want to extend the period in the future - but do you still get the 3 months if you lengthen the period by a day?

For example, a company with an ARD of 31 December changes its ARD to 1 January today. Is the new deadline 2 December 2015 for the 2014 accounts ?

Thanks (0)
avatar
By Wanderer
02nd Sep 2015 13:06

Maybe

@Portia Maybe? Probably why he extended then shortened. As you say he has also lost the ability to extend for five years.

@Lion Nope, it's only the shortening that works.

Thanks (0)
Replying to leshoward:
RLI
By lionofludesch
02nd Sep 2015 13:11

Interesting

Wanderer wrote:

@Lion Nope, it's only the shortening that works.

Interesting.  Logic would suggest that lengthening would be a bigger issue. Shortening would mean you had more time than the usual nine months.  Lengthening would reduce the period available for compliance.

Thanks (0)
avatar
By petestar1969
02nd Sep 2015 13:37

Yes

I did know about the five year rule and to be honest I can't think of a sensible reason to ever extend an accounting period so don't see it as a problem. It certainly wasn't a "mistake" on my part.

I normally need to shorten them so the "big" profit in month 12, if there is one, drops into the next year.

I also know about the 7 days rule, thanks :)

Thanks (0)
Portia profile image
By Portia Nina Levin
02nd Sep 2015 13:47

That is okay then

I must assume you just wanted to both extend and shorten period for some other good reason then.

Thanks (0)
avatar
By Wanderer
02nd Sep 2015 13:48

So why

did you extend it then???

You said that it only works if you change it by one day then change it back. Clearly that is incorrect.

Thanks (0)
Portia profile image
By Portia Nina Levin
02nd Sep 2015 14:05

I disgree with you there

What petestar said was "In my experience" it only works if you change it by one day and then change it back. That comment may be correct, and it may be the experience that is at fault.

Thanks (1)
avatar
By Wanderer
02nd Sep 2015 14:12

:)    :)    ;)   !

Thanks (0)
By Ruddles
02nd Sep 2015 14:15

Lengthening and then shortening

I did this for a client recently, and here is why. 31 July year end, but ARD shortened several times to 25 July. Therefore at risk of 'running out' of time to continue to prepare accounts to 31 July. So, ARD extended to 31 August and then immediately shortened to 7 August. Result - a further 3 months to file accounts and 14 years available to further shorten ARD without changing accounts date. Sure, they can't extend again for another 5 years, but that isn't considered to be an issue for them.

Thanks (2)
Replying to bobbydb:
RLI
By lionofludesch
02nd Sep 2015 15:17

A great wheeze

Ruddles wrote:

I did this for a client recently, and here is why. 31 July year end, but ARD shortened several times to 25 July. Therefore at risk of 'running out' of time to continue to prepare accounts to 31 July. So, ARD extended to 31 August and then immediately shortened to 7 August. Result - a further 3 months to file accounts and 14 years available to further shorten ARD without changing accounts date. Sure, they can't extend again for another 5 years, but that isn't considered to be an issue for them.

A great wheeze.

 

Thanks (0)