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Can I shorten the accounting period?

Can I shorten a 28 Feb 19 y/e to 31 Dec 2018, even though the deadline for Dec accounts has passed?

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A wee bit of help for a non-accountant please.

I am looking at the CT for a company with a 28 Feb 19 year end.

A lot of capital expenditure has been made in the period 1 Jan 19 – 28 Feb 19, exceeding the maximum AIA due for that period by a significant amount.

I’m thinking about shortening the accounting date to 31 Dec 18, meaning the big spend falls into the period 1 Jan 19 to 31 Dec 19, and so can utilise the £1m AIA limit.

Obviously the filing date for 31 Dec 18 accounts has passed, so can I do this?

CA 2006 s392, which deals with alterations to accounting reference dates, subsection (4) states:

A notice under this section may not be given in respect of a previous accounting reference period if the period for filing accounts and reports for the financial year determined by reference to that accounting reference period has already expired.

 

I’m reading that as saying that if the filing date for the 28 Feb 19 accounts has passed, then I can’t shorten the period (or increase it). But as the filing date has not passed, then I presume I can shorten the period, and then have 3 months to submit accounts to 31 Dec 2018.

Obviously CT filing and payment date shortens as well (and the CT payment would be late), but the extra AIA we could obtain next year would make up for that.

Can I do this?

Replies (16)

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RLI
By lionofludesch
08th Nov 2019 14:45

Yes - you have until 30th November, 9 months from the current year end.

Thanks (1)
Replying to lionofludesch:
Lone Wolf
By Lone_Wolf
08th Nov 2019 15:11

Thanks Lion

Thanks (0)
Replying to Lone_Wolf:
Psycho
By Wilson Philips
08th Nov 2019 15:30

I agree with Lion. Out of interest, how much total spend was there in the year to 28 Feb 19?

Thanks (1)
Replying to Wilson Philips:
Lone Wolf
By Lone_Wolf
08th Nov 2019 15:58

£600k qualifying spend. £210k pre Jan 19, and £390k between Jan and Feb.

Will lost out on some AIA @ £200k by shortening to 31 Dec, but means the £256k or so we are over the limit with so far can fall into the £1m AIA era. Spend between Mar 19 and Dec 19 has also been high, but still all under the £1m.

Thanks (0)
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By JDBENJAMIN
08th Nov 2019 15:12

If you are a non-accountant, I suggest you ask someone who IS an accountant and who will assess the situation fully. Any answer we give here would not take account of umpteen facts that might be relevant which you have not mentioned. Who prepares your accounts and returns? They should be the one to whom this question is directed, and if they (i.e. you?) don't know the answer, hire someone who does.

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Replying to JDBENJAMIN:
Psycho
By Wilson Philips
08th Nov 2019 15:27

What additional facts do you think would be required to answer the question about shortening the accounting reference date?

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Replying to JDBENJAMIN:
avatar
By The Dullard
08th Nov 2019 15:30

Wagner!

Thanks (1)
Replying to The Dullard:
RLI
By lionofludesch
08th Nov 2019 16:18

The Dullard wrote:

Wagner!

Your spelling is shocking, Dulls.

Thanks (0)
Replying to JDBENJAMIN:
Lone Wolf
By Lone_Wolf
08th Nov 2019 15:47

JDBENJAMIN wrote:

If you are a non-accountant, I suggest you ask someone who IS an accountant and who will assess the situation fully. Any answer we give here would not take account of umpteen facts that might be relevant which you have not mentioned. Who prepares your accounts and returns? They should be the one to whom this question is directed, and if they (i.e. you?) don't know the answer, hire someone who does.


Touchy touchy.

What facts are you looking for to better enable you to answer the question? I'm not asking if it is beneficial for it to be done, I'll work that out, I'm asking if it can be done.

And who have I to hire to ask the question. Surely Any Answers becomes pointless if even professionals can't come on to ask questions of each other.

As it is, my accountant colleagues prepare the accounts - as a CTA I only deal with the tax side of things once they are prepared. Unfortunately this situation doesn't seem to have cropped up for them before (shortening an AP to a date that should have been filed already), so they were unsure of the answer, hence why I ask the good people of AWeb (having done my research beforehand like a good little wolf).

I am now in the position of being a non-accountant that knows more about this particular area than the accountants in my firm, so go me.

Have a nice day Benji.

Thanks (7)
Replying to JDBENJAMIN:
RLI
By lionofludesch
08th Nov 2019 15:56

JDBENJAMIN wrote:
Any answer we give here would not take account of umpteen facts that might be relevant which you have not mentioned.

Can you list these umpteen facts ?

I can only think of

1. Current ARD.

Thanks (1)
Replying to lionofludesch:
Psycho
By Wilson Philips
08th Nov 2019 16:09

I can think of another.

2. Today's date

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Replying to Wilson Philips:
RLI
By lionofludesch
08th Nov 2019 16:12

Oh aye.

Thanks (1)
Replying to JDBENJAMIN:
panda ketteringUK
By ketteringUK
08th Nov 2019 16:04

you must be new here as lonewolf has been posting here and assisting others for years!

Thanks (2)
Replying to JDBENJAMIN:
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By SWAccountant
08th Nov 2019 16:04

Good try. That is the answer this place loves to give, but even I've been here long enough to know that the OP isn't a freeloader and answers plenty of questions him/her/them/itself.

Thanks (2)
Replying to SWAccountant:
panda ketteringUK
By ketteringUK
08th Nov 2019 16:10

exactly , btw Dipak Rajgor esq (CEO too) is asking for FOC advice!

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Replying to JDBENJAMIN:
Bramble
By Chris.Mann
09th Nov 2019 23:18

Why is it you always appear to be out of sync?

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