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
To change your company's year end, you file form AA01 with Companies House. This changes your accounting reference date (ARD), which determines when your annual accounts period ends. Filing AA01 is free and usually processed immediately when done online.
How to file form AA01:
- Log in to the Companies House WebFiling service at companieshouse.gov.uk
- Select your company
- Choose 'Change accounting reference date'
- Enter the new date you want your accounting period to end
- Choose whether to extend or shorten the current period
- Submit. Confirmation is usually instant for online filings.
You can also file by post, but online is faster and provides immediate confirmation.
Rules for extending your accounting period:
- Maximum accounting period is 18 months
- You can only extend once every 5 years
- The AA01 must be filed before your current accounts filing deadline. If your deadline has already passed, Companies House will reject the extension.
- Exceptions to the 5-year rule: your first accounting period after incorporation, bringing your ARD in line with a parent or subsidiary company, or if Companies House has ordered the change under an administration order
Rules for shortening your accounting period:
- You can shorten as often as you want, no restrictions
- Minimum accounting period for Companies House purposes is one day, but practically it needs to be long enough to prepare meaningful accounts
- You can shorten a current period (that has not yet ended) or a previous period (one that has ended but accounts have not yet been filed)
- Shortening a previous period only works if the accounts for that period have not yet been delivered to Companies House
Strategic reasons to change your year end:
Tax planning: If your company has had an unusually profitable period, extending the accounting period can spread profits across two Corporation Tax periods, potentially keeping each below the marginal relief threshold. Conversely, shortening can accelerate a loss into the current period for earlier relief.
Aligning with the tax year: Many directors choose 31 March as their year end because it closely aligns with the 5 April tax year end. This simplifies personal tax planning, especially for salary and dividend decisions. A 31 March year end also means your Corporation Tax payment falls on 1 January, well separated from the January Self Assessment deadline.
Aligning with a parent company: If your company has been acquired or is joining a group, aligning year ends simplifies consolidated accounts preparation.
Avoiding busy periods: December and March are the most common year ends. Changing to an off-peak month (June, September) can make it easier to get accountant availability and may reduce fees.
Matching business seasonality: Retail businesses might prefer a January year end (after Christmas trading). Seasonal businesses might choose a year end at their quietest point when stock levels are lowest and easier to value.
How changing your year end affects your deadlines:
All filing and payment deadlines are calculated from your new ARD: - Companies House annual accounts: 9 months after the ARD (or 21 months for the first accounts) - Corporation Tax return (CT600): 12 months after the end of the accounting period - Corporation Tax payment: 9 months and 1 day after the end of the accounting period
Example: Changing from 31 December to 31 March
Current ARD: 31 December 2025 New ARD: 31 March 2026 Accounting period becomes: 1 January 2025 to 31 March 2026 (15 months) Companies House deadline: 31 December 2026 (9 months after new ARD) CT payment deadline: 1 January 2027 CT600 filing deadline: 31 March 2027
Corporation Tax implications:
HMRC limits Corporation Tax accounting periods to 12 months. If your Companies House accounting period exceeds 12 months (because you extended), HMRC splits it into two separate tax periods. Profits are apportioned between the periods, usually on a time basis.
In the example above, the 15-month period would be split into: - Period 1: 1 January 2025 to 31 December 2025 (12 months) - Period 2: 1 January 2026 to 31 March 2026 (3 months)
Each period has its own Corporation Tax calculation, its own marginal relief calculation, and its own payment deadline. This can affect which rate applies if your profits are near the £50,000 or £250,000 thresholds.
Common reasons Companies House rejects an AA01:
- Filed after the current accounts filing deadline (for extensions)
- Trying to extend for the second time within 5 years without meeting an exception
- The new date would create an accounting period longer than 18 months
- Technical errors in the form (wrong date format, selecting wrong company)
Before you change your year end, check:
- When you last extended (Companies House filing history shows this)
- Whether your current accounts deadline has passed
- The Corporation Tax implications of creating a longer or shorter period
- Whether your accountant needs notice to adjust their schedule
- Any loan agreements or contracts that reference your year end
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?
Yes. If you extend beyond 12 months, HMRC splits the period into two Corporation Tax periods with separate calculations and payment dates. Profits are apportioned on a time basis. This can affect which tax rate applies if your profits are near the £50,000 or £250,000 marginal relief thresholds. Shortening your period can accelerate when tax is due.
What happens if I miss the deadline to file form AA01?
If you try to extend your accounting period after the filing deadline for your current accounts has passed, Companies House will reject the AA01. You cannot retrospectively extend a period whose filing deadline has already lapsed. This often results in late filing penalties if your accounts are overdue.
How often can I change my year end?
You can shorten your accounting period as often as you want with no restrictions. Extensions are limited to once every 5 years, with exceptions for the first accounting period after incorporation, aligning with a parent company, or by order of a court or Companies House.
What is the best year end date for a UK limited company?
31 March is the most popular choice because it aligns closely with the 5 April tax year, simplifying personal tax planning for directors. It also means CT payment falls on 1 January, well separated from the 31 January Self Assessment deadline. However, any date works. Consider your business seasonality, accountant availability, and group company alignment.
Can I extend my first accounting period beyond 18 months?
No. The maximum accounting period is 18 months regardless of whether it is your first period or not. However, your first period can be up to 18 months, and the 5-year extension restriction does not apply to the first period. Many new companies use this to align their first year end with a preferred date.
Do I need to tell HMRC separately if I change my year end?
Not directly. Companies House notifies HMRC of the change. However, you should verify that HMRC has updated their records, as the Corporation Tax payment and filing deadlines will change. Check your HMRC Business Tax Account to confirm the new dates are reflected.
Can I change my year end if my accounts are overdue?
You can shorten an overdue period (which may help you file sooner), but you cannot extend a period whose filing deadline has already passed. If your accounts are overdue, the priority is to file them as soon as possible to stop late filing penalties from accumulating.
What happens to my VAT returns if I change my year end?
VAT returns operate on separate quarterly periods unrelated to your accounting year end. Changing your year end has no effect on your VAT return schedule or deadlines. However, you may want to align your VAT quarters with your new year end for simpler management accounting.
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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