A company’s financial year is the period of time covered by a company’s annual (‘statutory’) accounts. This is normally 12 months long, except in the first year when the period runs from the date of company formation until the end of the same month the following year. This end-of-year date is known as the ‘accounting reference date’ (ARD). A company’s financial year will end on the same date every year, unless the ARD is changed.
What does accounting reference date (ARD) mean?
ARD stands for accounting reference date. This signifies the end of a company’s financial year, and it is the date the annual accounts should be made up to (although there is a lee-way of 7 days either side of this). Companies House provides an ARD to all companies shortly after incorporation. The ARD will usually fall on the anniversary of the last day of the month of company formation.
- If you registered a company on the 1st of March 2020, your accounting reference date will be March 31st every year from 2021.
- Your company’s financial year will run for a 12-month period from 1st April – 31st March each year.
You must deliver annual accounts to Companies House every year. The deadline is 9 months after the end of your company’s financial year.
Can I change my company’s financial year end?
Provided your annual accounts are not overdue, you can change your company’s accounting reference date to shorten or lengthen your financial year. You may shorten it by as many months as you like, as often as you wish, as long as it is not the Company’s first set of accounts (which need to be a minimum of six months). On the other hand, you may only extend your financial year once every 5 years (unless the company is administration, Companies House have provided special permission, or you’re aligning the dates with the rest of the group), up to a maximum period of 18 months from the previous ARD.
Once you have changed your ARD, you’ll need to let Companies House know by completing and filing Form AA01. Alternatively, you can use Rapid Formations’ free Online Admin Portal. Simply log in to your client account and change the ARD in your customer area. If you are not an existing client of Rapid Formations, you can easily create a free account, import your company details onto our system and make the necessary changes to your ARD.
Informing HMRC about changes to your ARD
Any changes made to the ARD will affect your company’s corporation tax accounting period. If you shorten your financial year, you must inform HMRC when you file your Company Tax Return. If you extend the financial year beyond a 12-month period, you will be required to file two Company Tax Returns – one tax return for the first 12 months, and a second return for the additional period.