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Why would Ltd change year-end?

A company had a year-end of 31st March 2018 and filing deadline was 31st December. Just before Christmas they changed their year-end to 30th March 2018 and this triggered a change to their filing deadline - now it's 21st March 2019. Have they done this to avoid paying CT until later? I can't understand why they would do this - especially so close to their filing deadling. 

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04th Jan 2019 10:05

they have done it to give themselves a filing extension at Companies House. It won't affect the tax due date.

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to snickersinatwix
04th Jan 2019 10:14

But why would they do that? They need to have their figures finalised for the CT calculation, so why not file the figures?

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to Fairymonster
04th Jan 2019 10:22

They don't need to file their CT until a year after their year end.

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By DJKL
to Fairymonster
04th Jan 2019 10:29

They need to make a payment to account re CT but the CT return itself is not due to HMRC at 9 months but at 12 months.

I understand that some larger entities take years lodging and agreeing their final CT computations.

We are not that large but I certainly do a rough draft of our tax comp re the accounts tax provision and then quite often do not complete the final , to be submitted version, until after 30 September (we are a December year end), the fact is the over /under charge/liability in the accounts will likely not differ by more than £1-£2k from the return which is frankly not that material.

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to Fairymonster
04th Jan 2019 17:27

Because they DON’T have the figures finalised.

They have to pay the tax, yes, but they may not have any tax to pay or may prefer to pay a very small amount of interest on that tax rather that actually get their figures in.

The trick is shorten a day, and since Companies House went online it’s a lot easier to spot the trick which was never well understood.

I’ve a client that has a December 17 year end. At the end of September no figures had been forthcoming so I shortened for him to 30th December, buying another three months to file. Then last week, I extended the year end to June 18. New deadline is now March 19.

At the end of March 19 I could shorten to 29th of June to buy him another three months.

At June 19 I could even then shorten BACK to December 17 which would still give him another three months and mean he doesn’t have to change year end.

All perfectly legitimate for Co House.

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to Fairymonster
04th Jan 2019 11:40

Fairymonster wrote:

But why would they do that? They need to have their figures finalised for the CT calculation, so why not file the figures?

That's a big assumption you're making there.

If I may say so, perhaps you are being a little naïve.

Far more likely that they've left it until the last minute and found that that minute isn't long enough.

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04th Jan 2019 10:44

It seems strange for a small company to do that (in my example). The record-keeping is relatively straightforward. It's for a provider of care in the home - so the debtors are either the clients or the local authority. Their invoices have to be raised and processed promptly and the main cost to the business is the wages of the 10 employees.

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to Fairymonster
04th Jan 2019 10:49

Can't disagree with your logic but your sentiments are displaying naivety about how some business people operate.

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to Wanderer
04th Jan 2019 10:53

It seems so! Although I'm surprised it's taken 30 years for this to find me (management accountant, not in practice). Lots of messy accounts and boxes full of tatty receipts stuck together with goodness knows what, but they all filed without extensions.

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to Fairymonster
04th Jan 2019 11:29

Ha ha - I was going to say you are not in practice are you!!! Last minute.com is the bain of our lives and the preferred way to go with many clients, leaving everything until it is too late and then expecting us to sort it all out for them. I hate pulling this trick, but did exactly this for one of our clients in December. Whether he manages to get the records to us by the new March filing deadline remains to be seen (dubious IMO) but he can face the music after that.
Don't get me started on the number of clients who still have not brought us their records for filing their 2018 tax returns yet - now due in just 27 days.....

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to snickersinatwix
04th Jan 2019 11:32

I feel your pain! Thanks all, I think you've all helped answer my question. The company's one I follow at Companies House and I have no idea how they satisfy their obligations. Not very well, seems to be the answer.

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to Fairymonster
04th Jan 2019 11:42

Or cutely, depending on your perspective. After all, they knew a trick that you didn't.

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to Fairymonster
04th Jan 2019 16:11

Phew! I thought you'd caught me out because the dates correlate exactly with one of my client companies. However they're not a care provider so I'm in the clear.

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