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)
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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.
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".
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.
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... :)
@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.
@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.
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 ?
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.
Interesting
@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.
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 :)
That is okay then
I must assume you just wanted to both extend and shorten period for some other good reason then.
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.
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.
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.
A great wheeze
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.