How to Change Accounting Reference Date

When you set up a limited company in the UK, you’ll have an official Accounting Reference Date (ARD). This date signifies the end of your company’s financial year and determines when you must submit annual accounts to Companies House. Typically, it falls on the anniversary of the last day of the month in which your company was formed.

The great news is that changing your company’s Accounting Reference Date is a simple and quick process. Whether you prefer to do it online or by mail, it only involves a few simple steps. In this guide, we’ll walk you through when you can make the change, how to do it, and what to keep in mind along the way.

An Accounting Reference Date (ARD) is the official date that marks the end of a company’s financial year. To put it simply, it’s the date up to which your company’s annual accounts are prepared, and it determines when you need to submit your financial statements to Companies House.

This date is set when your company is initially registered with Companies House. Typically, your first ARD will fall on the last day of the month in which your company was created, exactly one year later.

The ARD is crucial for setting your reporting deadlines. It indicates when your annual accounts are due and helps you keep track of your filing schedule. Here’s a straightforward example: If your ARD is December 31, your company’s financial year will span from January 1 to December 31. Consequently, you’ll need to submit your accounts to Companies House within nine months of the ARD, in this case, by September 30 of the following year.

The Accounting Reference Date is significant because it determines the period your annual accounts will cover. It also affects when you need to file your accounts and pay Corporation Tax to HMRC. While many businesses choose to keep it as is, others may opt to change it for tax planning purposes, to align with other companies in a group, or to match with their trading year.

While a lot of companies stick to their original Accounting Reference Date, there are definitely times when changing it can really benefit business planning and financial management. Here are some of the most common reasons why companies choose to shift their accounting year-end:

1. Aligning ARD with the Financial Year

Many businesses like to align their ARD with the standard tax year, which runs from April 6 to April 5. This alignment simplifies record-keeping and helps ensure everything is in order when it comes time to prepare tax returns. It also makes life easier for accountants who are juggling both company and personal tax matters simultaneously. By setting your ARD closer to the end of the tax year, you can streamline the overall reporting process.

2. Aligning with Group Companies or Trading Cycles

If your business is part of a larger group, having all the companies share the same financial year-end can really simplify things. It makes preparing group accounts, comparing performance, and managing tax issues a whole lot easier. But even if you’re running solo, syncing your financial year with your trading cycle or peak seasons can be beneficial. For instance, if your business sees most of its sales during the Christmas rush, you might find it more practical to wrap up your financial year in January, right after the holiday hustle and bustle.

3. Extending or Shortening the Financial Year for Strategic or Commercial Reasons

Companies sometimes change their accounting year-end for various strategic or commercial reasons. For instance, if you're planning a significant event like a business sale or merger, you might want to extend your financial year to include everything in one set of accounts. On the other side, if you're looking to streamline your finances before a big change; like bringing in new directors or relocating your business, shortening the financial year could be the way to go.

4. Adjusting for Cash Flow Management or Business Milestones

Changing your accounting year-end can help you keep better control over your money by timing tax payments to suit your financial position. It can also be helpful when working towards important business milestones, like launching a new product or opening a new branch. By adjusting your financial year, you can match your accounting periods to these events and manage your accounts more smoothly.

There are a few important rules and deadlines you’ll need to follow to change accounting reference date. Companies House has set limits on when and how often you can make changes, so it’s worth knowing the key points before you start.

Maximum Allowable Periods

When it comes to extending your financial year, there are some important limits to keep in mind. You can extend your financial year to a maximum of 18 months from the start of your accounting period. For example, if your financial year started on January 1, 2024, the longest it could possibly run would be until June 30, 2025.

Additionally, you can only extend your financial year once every five years. There are a few exceptions to this rule, which include:

• The company is in administration.
• The company is aligning its Accounting Reference Date (ARD) with that of a parent or holding company.
• Companies House has given the green light due to special circumstances.

On the other side, there’s no limit on how many times you can shorten your financial year, so feel free to do that as often as you need.

When You Cannot Make Change of Accounting Reference Date

There are specific conditions where changing your Accounting Reference Date isn’t allowed. These include:

• If your accounts are overdue. You’ll need to file any outstanding accounts before you can request a change.
• If you’ve already extended your financial year once in the past five years, unless you qualify for one of the exceptions mentioned earlier.
• If the extension would push your accounting period beyond the 18-month maximum limit.

Deadlines Based on Accounts Status

The timing for changing your ARD depends on whether your accounts are due or already submitted: -

• If your accounts aren’t due yet: You can apply to shorten or extend your financial year without any hassle, as long as you stay within the allowed limits.
• If your accounts are overdue: You won’t be able to change the ARD. In this case, you’ll need to file the outstanding accounts first.
• If you’ve already submitted accounts: You can still request a change for your next accounting period but, keep in mind that this change will only apply to future filings, not the one you’ve already submitted.

You can change your company’s Accounting Reference Date (ARD) either online or by post. Here’s a simple, step-by-step guide to help you understand both methods.

1. Online via Companies House WebFiling

The fastest and most convenient way to change your Accounting Reference Date is through Companies House WebFiling. Most companies opt for this route because it’s quick, and you’ll get an update right away.

1.1 Access Your WebFiling Account

Go to the Companies House WebFiling service. You’ll need your company’s authentication code to log in. This unique code is sent to your registered office when you first set up your WebFiling account. If you can’t find it, don’t worry—you can request a new one from Companies House.

1.2 Submitting the Appropriate Form

Once you’re logged in, select your company and look for the option to 'Change accounting reference date.' You’ll need to enter the new date you want to use. Make sure to double-check the date before you hit submit, as it will impact your future filing deadlines.

1.3 Confirmation Process

After submitting the form, Companies House will process your request. In most cases, you’ll receive a confirmation email within a few minutes letting you know that your new Accounting Reference Date has been accepted and updated in their records.

2. By Post

If you’d rather do it the old-fashioned way, you can also change your Accounting Reference Date by post. This method takes a bit longer but is great for those who prefer handling paperwork in person.

2.1 Download and Complete Form AA01

First, download Form AA01 (Change of accounting reference date) from the Companies House website. Fill in the necessary details, including:

• Your company number
• Company name
• New Accounting Reference Date

2.2 Double Check the Details

Take your time to ensure all the information is correct, as any mistakes could slow down the process.

2.3 Send the Form

Once you’ve completed the form, post it to:

The Registrar of Companies,
Companies House,
Crown Way,
Cardiff,
CF14 3UZ

It usually takes 10 working days for Companies House to process your form and update your company records. Companies House has stopped sending paper letters to confirm when your accounting reference date has changed. If you want to check your new accounting reference date, you can easily search for your company.

Changing your accounting reference date (ARD) might seem like a simple task, but it can have a significant impact on your tax deadlines, filing periods, and overall financial strategy. That’s why it’s a wise idea to seek assistance from a limited company accountant.

A skilled accountant can evaluate whether adjusting your ARD is the best move for your business. They’ll handle all the necessary paperwork, ensure the request is submitted on time, and help you avoid late submissions or mistakes.

Why Partner with a GoForma accountant?

• Receive tailored advice on the best date for your business
• Avoid errors when filling out forms or selecting your new ARD

Whether you’re just starting out or your business is expanding, a knowledgeable accountant can streamline the entire process for you. Reach out to our limited company accountants today and let’s take care of your ARD change the right way.

‍

Can I change my ARD more than once a year?

You can shorten your financial year as often as you like, but you can only extend it once every five years, unless special rules apply.

Is there a cost to change ARD?

No, it’s free to change your Accounting Reference Date with Companies House, whether you do it online or by post.

What if my accounts are overdue?

If your accounts are overdue, you can’t change your Accounting Reference Date. You’ll need to file the overdue accounts first before making any changes.

Can I align my ARD with tax year end (5th April)?

Yes, you can change your ARD to match the tax year end of 5th April if it suits your business. You’ll just need to submit a request to Companies House.

Do I need to inform HMRC separately?

No, you don’t need to tell HMRC separately. Companies House shares the updated ARD with them.

Does changing ARD affect my tax year?

Changing your ARD doesn’t change the tax year, but it can affect your company’s corporation tax deadlines and accounting periods.

How do I find my accounting reference date?

You can find your Accounting Reference Date by checking your company details on the Companies House register or on your certificate of incorporation.