I have taken on a new limited company client. Their year end is 5th April as opposed to 31 March.
I have asked the client why this date and he said that he thought it he had to have it at that date and his original accountants didn't question it. (He used to be an IT contractor but the business has grown into a 'proper' business i.e. not subject to IR35)
Its far easier to change it to 31 March and the client has agreed but I am just wndering if there is any advantage to leaving it at 6th April. I can't hink of any.
Replies (8)
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Duhamel wrote:
It's 5 days. Who cares?
And I would take care over whether you mean 5 or 6 April.
Well obviously I care otherwise I wouldn't have written the post.
The reason is that some reports in my accounting software can be run on specific dates and other reports can only be run at the month end. There are ways around it but errors can creep in when you are dealing with a non standardised process when every other client is at a normal month end.
It is purely in my practices self interest to do it. Client doesn't care either way.
Because your question mentions both 5 April and 6 April. Take care.
Yeah obviously you care, but you certainly don't take care!
You mentioned both dates in your post above, that's why it has been pointed out to you!
#alwayscheckyourpost
I always thought that a limited company had to have an end of month year end (as it certainly makes life easier with VAT returns etc) but apparently not - this link from Companies House might help -
https://companieshouse.blog.gov.uk/2015/12/23/a-guide-to-accounting-refe...
"For all new companies, the first accounting reference date is set as the last day in the month in which its first anniversary falls. The subsequent accounting reference dates will automatically be on the same date each year. A company may make its accounts up to 7 days either side of their accounting reference date"
Even though the year end is 5 April I believe you can still prepare accounts to 7 days either side of this and CH will accept them...but I would just change it to 31 March and make sure the vat was the same quarter end...just makes life simpler
I agree - there is no advantage to having the current date (or one of 6 April).
I would either make up the accounts to 31 March (as within 7 days) or change the ARD.
Perhaps not in this case, but choosing between 5 April (or 31 March) and 6 April could have a significant impact for an IR35 company