How do I change my company's accounting year end?
File form AA01 with Companies House to change your accounting reference date. You can extend once every 5 years (up to 18 months) or shorten as often as needed.
Detailed Explanation
Changing your accounting reference date (ARD)
Form to file
AA01 with Companies House (free)
Extending your year
- Can extend to maximum 18 months - Can only extend once every 5 years - Exception: first accounting period after incorporation - Exception: bringing ARD in line with parent company - Must file before current accounts deadline
Shortening your year
- No limit on frequency - Minimum accounting period is 6 months - Can shorten current or previous period
Why change year end?
- Align with tax year (31 March) for simpler tax planning - Align with parent company - Move away from busy accountant periods - Match business seasonality - Tax planning (defer/accelerate profits)
Impact on deadlines
New filing deadlines calculated from new ARD: - Companies House: 9 months from new ARD - Corporation Tax return: 12 months from new ARD - Corporation Tax payment: 9 months + 1 day from new ARD
Example
Current ARD: 31 December Change to: 31 March Next accounts cover: 1 Jan - 31 March (15 months if extended)
Corporation Tax
- May result in two accounting periods for tax - Profits apportioned between periods - Consider impact on marginal relief thresholds
Process
1. Check eligibility (not extended in last 5 years) 2. File AA01 online or by post 3. Usually processed immediately online 4. Companies House confirms new ARD
Source: Companies House Accounting Reference Date
Real-World Examples
Consolidating with a Parent Company
Your limited company has been acquired by a larger group with a December 31st year end. You need to change your ARD from March 31st to December 31st to align your reporting with the parent company's, making consolidated financial statements easier to prepare.
Preparing for a Sale
You are planning to sell your company in the next year. Shortening your accounting period to provide more up-to-date financial information to potential buyers may make the company more attractive and speed up the due diligence process.
Smoothing Tax Liabilities
Your company has historically had volatile profits, fluctuating significantly between years. By shortening or lengthening your accounting period, you might be able to spread some of the tax burden across different tax years, potentially reducing your overall tax liability (seek professional advice).
Common Mistakes to Avoid
- Failing to file form AA01 before the filing deadline for your accounts, resulting in late filing penalties.
- Extending your accounting period more than once in a five-year period without meeting the exceptions (first year or alignment with a parent company).
- Incorrectly calculating the new accounting period end date, leading to errors in your financial reporting.
- Forgetting to update your accounting software and HMRC records with the new accounting period end date.
Frequently Asked Questions
Does changing my accounting year end affect my Corporation Tax liability?
Yes, it can. Your Corporation Tax liability is still calculated based on your profits for the accounting period, but a change may shift when the tax is due. If you extend your accounting period, you'll report profits over a longer period and pay tax later. Always seek professional tax advice.
What happens if I don't file form AA01 on time?
Failing to file form AA01 before the deadline for your annual accounts will result in Companies House rejecting the change of accounting reference date. This will likely mean late filing penalties if your accounts are filed after the original deadline.
If I shorten my accounting period, does that affect my future accounting periods?
Yes, shortening your accounting period creates a new, shorter period, and all subsequent accounting periods will follow the new accounting reference date until you change it again.
Can I change my company name at the same time as changing my accounting year end?
Yes, these are separate processes. You can file form NM01 to change your company name at any time, and it's separate from filing form AA01 for the accounting reference date change.
Practical Tips
- Check your Companies House filing history to confirm when you last extended your accounting period to ensure you're eligible for another extension.
- Use the Companies House online service to file form AA01 electronically, which is generally faster and more efficient than postal submissions.
- Before changing your accounting year end, consult with your accountant to understand the potential tax implications and ensure it aligns with your business strategy.
- Set a reminder in your calendar well in advance of the accounts filing deadline to file form AA01 if you plan to change your accounting year end.
Related Questions
When are annual accounts due?
Annual accounts must be filed with Companies House within 9 months of your accounting period end. For HMRC, you have 12 months to file your Corporation Tax return including the accounts.
What is a Confirmation Statement?
A Confirmation Statement (formerly Annual Return) confirms your company's details are correct with Companies House. It's due at least once every 12 months and costs £34 to file online.
What is Making Tax Digital (MTD)?
Making Tax Digital is HMRC's initiative requiring businesses to keep digital records and submit returns using compatible software. VAT is already under MTD; Income Tax follows in April 2026.
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