A few thoughts on the Year End

April 5, 2018

What do you think is the most popular month of year end?  To find out, read on!


As we fast approach the end of the UK’s financial year, many of you will be feeling a dark sense of foreboding that soon your statutory accounts and corporation tax return will be due for preparation.


We thought it would be useful to recap the filing deadlines and also to remind you that Instafile is here to help take the stress out of filing!



How to find my company’s filing deadlines


One way is to find your year-end date is on the Companies House website.  However, this does not inform you of all of your deadlines.


We at Instafile have made this a lot easier with our Filing Deadlines Calculator.  Just type in your Company Registration Number and it will give you all the information you need: your financial year end date, your filing deadlines and your tax payment deadline.  You can even ask Instafile to send you an email alert when your deadline is near!



What are the timings of your filing deadline and tax payment deadline?


When you set up your company, you also set up an accounting year end date, also known as your “Accounting Reference Date” (ARD). The three important deadlines are:


1. You have 9 months to file your financial statements to Companies House after your ARD.

2. You have 9 months and 1 day to pay your tax after your ARD.

3. You have 12 months to file your corporation tax return (CT600) after your ARD.


Yes, you have read that correctly – you need to pay your tax approximately three months before the final deadline for submitting your CT600 corporation tax return.



Are there any advantages to submitting returns early vs on deadline day?


There are no advantages to submitting your returns on deadline day, other than giving you the maximum amount of time to prepare these important documents.  However, as small business owners ourselves, we know that the feeling of having the accounts hanging over us is never a good one.


This is why we at Instafile recommend you prepare your accounts as soon as possible.  We have built the Instafile system with this in mind – quick, painless and stress free.  In a matter of minutes you will have your financial statements prepared for Companies House and your corporation tax return (CT600) prepared for HMRC.


There may even be a benefit to preparing and submitting your corporation tax return early: if you are due a cash payment from HMRC (e.g. from R&D tax credits), this may be processed early if you submit your tax return early.


Please note that for cash flow purposes, there is an advantage to paying your corporation tax on deadline day.



How do I decide my financial year end date (Accounting Reference Date)?


As a business owner, you have the ability to nominate your financial year end date.  It is best to do this when you set up your business but you also have the ability to make a change at any point in the future (certain conditions apply – you can find out more here.


In the past, your ARD was automatically set as 12 months from the date of incorporation.  This created a situation where about 4% of UK non-dormant companies had a year-end date that did not fall on the month end date.  If you are one of those companies, you are probably finding the preparation of your Xero accounts and your statutory accounts difficult.  You can make things easier by changing your ARD - simply follow the process found here.


Recently, Companies House have changed their ARD-setting process and it is automatically set to the last day of the month, one year on from the date of incorporation.


You should choose the ARD based on whatever is easiest for you.  You should consider what makes most sense for how you interpret the financial numbers of your business.  Traditionally, many companies would set their year-end date at end of March to align with HMRC’s financial year (new tax rates usually come into force at the beginning of April).  However, Instafile automatically takes into consideration changes in tax rates over the course of the year.



So, what is the most popular month of year end?


Maybe surprisingly, it is not December!


In March, approximately 1 in 5 companies have their year-end date!   December is the second most popular month (approximately 13% of active companies).  All of the rest of the months are fairly evenly matched


Source: Instafile analysis of all 3.7m active companies in 2017.



Final Words


Whatever year-end date you have, we hope it is as stress-free as possible.  Do remember that Instafile seamlessly links with Xero, and can prepare your statutory accounts and corporation tax returns with just a few clicks of the mouse.


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