Your accounting date is also known as the accounting reference or year end date.
It is the date up to which your accounts are prepared and is generally the end of a calendar month although it can be any date.
For example 31st December or 31st March.
Depending on your business type the year end can be set by you or it could have been already set up as part of the official formation of your business.
Limited Company Year End
The year end of the limited company will have been set by Companies House when the company was formed.
The year end date will be the end of the month in which the company was set up.
For example if the company was set up on 5 March 2019 then the year end will be 31 March and the first accounts will be prepared to 31 March 2020.
First Year End
In your first year of trading the length of your accounting period could be more than one year.
For example, if your company was formed on 5th March 2019 and that is the date that you started to trade then the first year end will be 31st March 2020 with an accounting period of just over a year from 5th March 2019 to 31st March 2020.
Whilst the accounts that you file at Companies House can accommodate accounting periods in excess of one year without issue, the HMRC corporation tax systems cannot!
A corporation tax return (known as a CT600) can only have one year of trading on it.
So in this case two Corporation Tax returns will need to be filed with HMRC for the first period of trading being:
- 5th March 2019 to 4th March 2020
- 5th March 2020 to 31st March 2020
Companies House and HMRC
Although Companies House and HMRC are both Government departments, they do not talk to each other, share systems or information.
So any changes to the year end made at Companies House will also need to be communicated to HMRC; don’t expect HMRC to know about things just because you’ve told Companies House.
What is a Tax Year?
The Tax Year runs from 6th April to 5th April each year.
As an example, the Tax Year 2019 / 2020 runs from 6th April 2019 to 5th April 2020.
It is likely that your limited company has a different year end to the tax year end date.
This is normal but it is worth remembering that there are deadlines for both the company year end and the tax year end. Your accountant should advise on these.
Important Dates for filing Limited Company Accounts
As regards filing your accounts then the following are important:
- File the accounts at Companies House within 9 months from the end of the accounting reference date
- Corporation tax has to be paid within 9 months and one day from the end of the accounting reference date
- The corporation tax return has to be filed within 12 months from the end of the accounting reference date
A sole trader is a much simpler business structure.
Often times the year end date for a sole trader is the end of the tax year being the 5th April.
A sole trader files a self assessment tax return (SATR) by tax year and needs to produce the accounts (also to the tax year end date) so that the figures from those can be entered on the tax return. It’s as simple as that!