UK Accounting Reference Dates For Private Limited Companies
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When a private limited company is incorporated companies house advise the
company of the accounting reference date and a set of financial accounts are
required to be made up and submitted from the day of incorporation to this
accounting reference date. The accounting reference date is set by companies
house as the last day of the month 12 months after the date of incorporation.
For example a company registered on 7 January would have an accounting
reference date of 31 January the following year. Financial accounts are required
for the period from 7 January one year to the 31 January the following year.
The financial accounting period for a limited company which has been trading
in previous years starts on the day after the accounting reference date and
continues until the next accounting reference date. In the example above the
final accounts including profit and loss account, balance sheet and notes to the
accounts including audit report where required would be prepared from 1 February
until 31 January.
The accounting reference date can be changed by a limited company by sending
to companies house form 225. There is a time limit on when the form can be
submitted which in any financial year is the day before the accounts are due for
delivery to companies house.
There are a number of reasons why the directors of a limited company might
wish to change its financial year end although in the vast majority of cases the
financial year is not changed.
Common reasons for changing the financial year end date would be to bring the
year end date into line with other business interests such as an associated
company. Seasonal and trading factors may make one month end more appropriate or
the company might wish more time to prepare a particular set of final accounts
although it can be a problem if the date is changed more than once in a 5 year
A significant reason for changing the financial year end of a limited company
would be to bring the company financial accounting period into line with the tax
year as tax rules change from year to year and accounting and tax alignment
simplifies the tax calculation as only one years tax rules would apply instead
of two tax years rules when the tax year end is straddled.
For limited companies in the UK the practise in recent years has been for tax
rules and capital tax allowances changes to be announced in the budget each year
which is the third week of March and the tax rules to be applied from the 1
April the following year. An accounting year in line with the tax year end would
then be 1 April to 31 March each year.
A new private company filing its first set of annual accounts must do so
within 22 months of incorporation. In subsequent years the financial accounts
need to be submitted to companies house within 10 months of the company
accounting reference date. Companies house normally send a reminder of when the
accounts need to be filed 6 to 8 weeks prior to the deadline date.
Companies house automatically impose an escalating scale of civil penalties
on private companies for the late filing of the annual accounts as follows
Up to 3 months late the penalty fine is 100 pounds
Over 3 months and up to 6 months the penalty fine is 250 pounds
Over 6 months and up to 12 months the penalty fine is 500 pounds
Over 12 months the penalty fine is 1000 pounds
The accounting documents to be sent to companies house which are required to
be prepared in a specific format and in addition to stating the registered
office of the company and the company registration number for identification
purposes must also send
Profit and loss account or income and expenditure account for a non profit
Balance sheet signed and dated by a company director stating the company
asset and liabilities balances.
Directors report signed by a director or company secretary describing the
companies activities and also including for companies not classified as small
and exempt a business review of future performance.
Auditors report signed by the auditor unless the company is exempt from audit
under the small companies exemption rules.
When a small private company submits abbreviated accounts and takes advantage
of the exemptions then the accounts must also contain the statutory statements
as notes to the accounts advising the basis and exemptions under which the
annual accounts have been prepared.
About the Author
Terry Cartwright is a qualified accountant designing
on excel spreadsheets providing complete
Small Business Accounting Software solutions for small to medium sized
business with simple Bookkeeping to assist financial control through automated
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Article Published/Sorted/Amended on Scopulus 2008-04-03 12:43:02 in Tax Articles