7 Facts You Should Know About The Financial Year-End

Make sure the end of the year is free of unpleasant surprises.

12:08 27 March 2013

Depending on the type of business you run, your financial year end may not be conveniently situated for the 5th of April. The good news is that you have recourse to set up your financial year in a way which is more convenient, and ultimately more beneficial for your business.

 

• You can lengthen your company’s financial year up to 18 months.

 

• You can shorten your financial year to less than 12 months.

 

• Changes can only be made once every 5 years so be sure that this is a beneficial change for your financial year end.

 

• The company’s accounts must be in current status in order to process the change.

 

• If you change your financial year end, the period for Corporation Tax may also be affected.

 

• If you opt for a financial year that is longer than 12 months, two company tax returns will need to be filled out (one for 12 months, and the other for the remaining amount of time).

 

• Notify HM Revenue & Customs when sending a return for a time period less than 12 months.

 

Many business owners feel they are force into financial year ends that don’t correspond to the manner in which they do business. With these steps businesses have a lot of freedom and options to decide what type of financial year end makes the most sense for their type of business.

 

As with any significant changes, the proper departments must be contacted to affect the change, so enlist the assistance of Companies House and HM Revenue & Customs for any additional questions or concerns you may have about the process.

 

Planning ahead carefully will ensure that the transition is smooth and free of unpleasant surprises. Remember that once you change, it’s permanent for five years.