What is a company’s financial year and how do you change it?

Forming your company is a great first step towards achieving your business goals. But learning about accounting periods can feel challenging. Some critical early questions are, “what is my company’s financial year, can I change it and how?”

What is a company’s financial year?

Think of your financial year as a standard 12-month cycle during which you track all your business activities, income, expenses and profit.

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At the end of the year, you’ll use this information to prepare your annual accounts, which you must send to Companies House.

Understanding the accounting reference date (ARD)

The last day of your financial year is referred to as the accounting reference date (ARD). It’s a critical marker, because you must make up your annual accounts to this date, or a date seven days either side of the ARD if you prefer. This reference also dictates your deadlines for filing annual accounts and Company Tax Returns.

How Companies House sets your ARD

Companies House automatically provides your accounting reference date shortly after incorporation. For most, the date will be one year after the last day of the month in which the company is registered.

In your first year of trading, your reporting period will begin on the day of incorporation and run up to your designated ARD, so it will usually be slightly more than 12 months. However, in the years that follow, it will be exactly 12 months, unless you change your ARD.

Example of an ARD

Say you registered your business on 2 October 2025:

• Your annual ARD will be the last day of that month – 31 October – each year, with the first one in 2026
• Your first year will run from 2 October 2025 to 31 October 2026
• After that, your standard financial years will run from 1 November to 31 October.

How to adjust your company’s year-end

Don’t worry if your designated ARD doesn’t match with your reporting schedules, workflows or tax plans. You can alter your ARD, provided your annual accounts aren’t already overdue. You can only change the year-end date for the current or previous year.

Shortening your year

If you need to move your ARD forward (making your current year shorter), the rules are flexible. You can shorten the year by any number of months or days – even by just one day. You can do this as often as needed. The exception is that you cannot shorten the period if you’re submitting your first Companies House filing.

Extending your year

If you need more time to submit your accounts, you can extend your financial period up to a maximum of 18 months from your previous ARD, or longer if you’re in administration. But you can only lengthen it once every five years, unless:

• Your business is in administration
• You have special permission from Companies House
• You’re aligning dates with a parent company.

Notifying Companies House of a change in ARD

The options for registering a change in ARD are:

• Notify Companies House online
• Download and send Form AA01
• Use a company formation service.

Rapid Formations allows you to update the ARD in your admin portal, then we’ll handle the filing for you. If you’re not already a Rapid Formations client, you can easily create a free account, import your information, and then alter your ARD in our system.

What to tell HMRC when you change your ARD

Adjusting your year-end date directly affects your Corporation Tax accounting period, so you need to tell HMRC about the alteration to ensure your tax records align with your new ARD.

If you extend your financial year beyond the standard 12 months, you’ll need to send two separate Company Tax Returns because your accounting period cannot be longer than 12 months.

• The first return covers the standard 12-month period.
• The second covers the additional period, up to your new ARD.

Preparing two tax returns might sound daunting, but it’s crucial for compliance and ensures your tax is calculated correctly for each period.

Reasons to adjust your financial year

Your annual accounts period is important, so why change it? The main reasons companies do this are:

• Aligning with trading cycles. For example, if your ARD falls during your busiest sales period, preparing annual reports can consume time that you need for other tasks, leading to unnecessary stress and an increased risk of errors. Shifting the date to a quieter period allows you more time to prepare your year-end submission with more calm and accuracy.
• Matching your group structure. If your new company is part of a larger group or has been acquired by one, you will likely need to align your accounting period with the parent company to produce consolidated reports.
• Transitioning to new accountants. You might hire an accountant whose workflow aligns better with a different filing date. A one-time adjustment can smooth the new relationship.
• Giving yourself more time. Starting a business can be hectic, and sometimes new owners simply need an extension. Lengthening the first financial year, up to the 18-month limit, can give you time to organise your finances before tackling your first set of accounts.

Deadlines for filing accounts and tax returns

The deadline for sending annual accounts to Companies House is nine months after your ARD. To check your due date, the company information service displays it on your overview screen. You can also register for emailed deadline reminders.

The deadline for submitting your Company Tax Return (a separate document, sent to HMRC, that must include full accounts) is 12 months after the end of your company tax accounting period. This period may or may not align with your financial year. So, aligning your accounting period and financial year is another potential reason for changing your ARD. Filing them together is a great way to simplify your reporting.

Take advantage of expert support

Ultimately, whether you choose to alter your financial year depends on your unique business model and reporting cycles. Once you’re up and running, you’ll get a feel for whether a change can help you forge a more predictable and manageable rhythm in your business.

Ready to take control of your company’s compliance? Explore our Full Company Secretary Service for expert ongoing support.