How to Change Accounting Reference Date

goforma (33)in #changeard • 27 days ago

Changing your company's Accounting Reference Date (ARD) might seem like a daunting task, but it's actually pretty simple. Whether you're gearing up for tax season, coordinating with group companies, or syncing up with your business cycle, tweaking your ARD can give you more flexibility and better control over your financial year.

In this guide, we'll break down what an ARD is, why you might consider changing it, when it's permissible, and how to change Accounting Reference Date online or by mail --- plus we'll tackle some frequently asked questions.

What Is an Accounting Reference Date?Your Accounting Reference Date (ARD) is the official date that signifies the end of your company's financial year. It determines when your annual accounts and tax return are due.

When you establish your company, Companies House automatically assigns your ARD, which is typically the last day of the month in which your company was incorporated. For instance, if your company was set up on June 10th, your ARD would fall on June 30th each year.

Your ARD defines your accounting period and is crucial for planning business milestones, tax submissions, and financial reporting.

Why Change Your Accounting Reference Date?There are a few reasons why a company might want to change its ARD. Let's explore some of the most common motivations:

Tax PlanningAdjusting your ARD could help you spread profits across two tax years or postpone a tax payment. This can sometimes lower your overall tax liability or give your business a bit more breathing room to pay.

Aligning with Group Companies or Trading CycleIf your business is part of a group, you might want all companies in that group to have the same ARD. This simplifies group reporting and cuts down on administrative tasks.

Alternatively, if your business experiences a specific trading season --- like retail surging in December --- it might make sense to close your financial year just after your busiest time.

Cash Flow or Business MilestonesSome companies shift their ARD to coincide with significant business events, such as product launches or funding rounds. This can help you present clearer financials during crucial phases of your business.

Shorten or Extend Financial YearYou might find yourself wanting to shorten or extend your financial year for various business reasons, like aligning with the financial year of a new parent company or gearing up for a business sale.

When Can You Change Your Accounting Reference Date?You can change your Accounting Reference Date (ARD) before your accounts are due, but there are a few important rules to keep in mind:

Key Rules and Deadlines:
You can shorten your financial year as often as you need.

You can only extend your financial year once every five years, unless:

The company is in administration
The company is syncing up with a parent or subsidiary
You're filing accounts for a dormant period

If your accounts are already overdue, you can't change your ARD. In that case, you'll need to file your overdue accounts first before making any changes.

If you're considering changing your ARD, it's best to act early, especially if you're trying to meet a filing deadline.

How to Change Your Accounting Reference DateYou can change your ARD either online or by mail, and both methods are free.

Online via Companies House WebFilingThis is the quickest way to make the change.

Step 1: Log in to WebFiling
Head over to the Companies House WebFiling service and log in using your company number and authentication code. If you don't have the code, you can easily request a new one.

Step 2: Select "Change Accounting Reference Date"
Pick your company from the list and choose the option to change the ARD. Enter the new date you want and double-check everything.

Step 3: Submit and Wait for Confirmation
Submit the form online. Most updates show up on the public register within minutes, and you'll receive an email confirming the change.

By PostIf you prefer the traditional route, you can send in the change by post.

Step 1: Download and Complete Form AA01
Download Form AA01 from the Companies House website. Fill in your company number, name, and the new ARD.

Step 2: Send the Form to the Correct Address
Mail the form to:

Companies House
Crown Way
Cardiff
CF14 3UZ

Step 3: Wait for Processing
Typically, it takes about 10 working days for the form to be processed by post. Companies House will send you a letter once the change has been finalized.

Benefits of Managing Your ARDAdjusting your ARD can offer several advantages, such as:

Enhancing cash flow timing
Aligning accounts with group businesses
Synchronizing with busy trading periods
Allowing more time to prepare accounts or postpone tax payments
Keeping your reporting aligned with your business objectives

By regularly reviewing your ARD and making adjustments as necessary, you can streamline your business operations and reduce stress during filing periods.

Changing your Accounting Reference Date is a straightforward way to gain better control over your company's finances. Whether you want to manage tax timing, align with a busy trading season, or coordinate with other group companies, updating your ARD can provide significant benefits.

The process is quick, free, and simple --- especially if you follow the right steps. If you're uncertain about when to make the change or want to optimise your tax planning, it's a good idea to consult with a professional limited company accountant. They can guide you in selecting the best date and help you avoid any filing issues.

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27 days ago in #changeard by goforma (33)

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