Year End Change Benefits

Updated: 05.07.2023

Introduction

This gives the benefits of the year-end (Change of Accounting reference date) and depending on the facts and circumstances, we highly recommend this.

However, advice should be sought on each occasion before it is seriously considered and acted upon.

The above-named Article describes “an overview” of the purpose to which the “substantive contents” will be continually “populated” and “grown”, on a regular basis making its functionality extremely powerful.

By its nature it is “dynamic” and it is recommended that a request be made for its update, where the last dated updated is greater than the last thirty working days.

Change of Accounting Reference Date

In this example, we consider the year-end date to be 31March 2020.
This is extended to 30 September 2020.
This is the maximum period allowed i.e. by 6 months.
One cannot have an accounting period of more than 18 months. Companies House filing deadlines will be extended by 6 months.
The table gives the implications below.
HM Revenue & Customs filing deadlines will also change.
This will apply to submission of Corporation Tax computation and returns.
It will also apply to HM Revenue & Customs change of deadlines for payments.
No further extensions of the accounting period will be allowed in the next 5 years.
Starting from the date when the form to change the year-end is filed with the Companies House.
It will be possible to shorten the year-end, if required.
This will also extend the time to get the audits completed, as well.
The biggest benefit would be that the 12 months profit would be determined on a time apportionment basis i.e. 12/18 of the results.
On the assumption that the next 6 months will be loss of very little benefit, it will be averaged out over 18 months.
Further, the subsequent 12 months, if it produces lower taxable profits, it will give rise to lower tax bills.
It should give rise to lower tax liabilities over the next 3 years, at least.
The filing/payment deadlines will be changed as follows:

Date Table of Examples – Implications

Assumptions:
Exiting year-end 31 March 2020.
Extended year-end: 30 September 2020.

No	Type	Details	Current ARD	Current Deadline	Proposed ARD	Proposed Deadline
01	Accounts	CH filing	31/03/2020	31/12/2020	30/09/2020	30/06/2021
02	Accounts	HMRC filing	31/03/2020	31/03/2021	30/09/2020	30/09/2021
03	CT600	HMRC first payment	31/03/2020	01/01/2021	31/03/2020	01/01/2021
04	CT600	HMRC second payment	N/A	N/A	30/09/2020	01/07/2021

Useful Links

Companies House implications
Extension Periods for filling
How to Apply
HM Revenue & Customs implications
HM Revenue & Customs Manuals

Disclaimer & Other issues

Disclaimer Provisions
Credits
- Companies House
Copyright Acknowledgements