UK business registration, when is the accounting date?

[Deleted74396]

What do I put for the business accounting date? I can't find a good answer online!

The business wasn't active during the 2018/19 tax year so would I put the date of the start of the 2020/21 tax date (6/4/2020) or the end of the 2020/21 tax date (5/4/2021)? I'm so confused!

Thanks.

 

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[Mutant]

Are you talking about a limited company or are you a sole trader?
Is this for a tax return or some other reason?

 

[Stargazer]

The business accounting date is whatever you want it to be (12 month period)

Presumably your chosen date like most is simply the same as the Tax Year for ease so you have chosen 05/04

So every penny spent or made in the period 06/04/xx to 05/4/xx gets put on that tax return.

If you are self-employed you would do £0 and £0 on a simple tax return. (You should have done this by Jan 31st by the way)

If you are a Ltd Company you should have informed HMRC you were dormant.

Dan

 

[Deleted74396]

The business accounting date is whatever you want it to be (12 month period)

Presumably your chosen date like most is simply the same as the Tax Year for ease so you have chosen 05/04

So every penny spent or made in the period 06/04/xx to 05/4/xx gets put on that tax return.

If you are self-employed you would do £0 and £0 on a simple tax return. (You should have done this by Jan 31st by the way)

If you are a Ltd Company you should have informed HMRC you were dormant.

Dan

This isn't about self employment tax return. It's a new business registration, they want an accounting date. Do I put 5/4/2020 then?? And that's when I file accounts from now until the 5th April? It just seems weird to put the date a month away, but I'm really worried I'll do it wrong. I am prone to messing up with accounting. If I put it in 12 months time, it makes more sense as I have a normal years worth of accounts, but then my accounts are a month before the tax year ends and that could get confusing couldn't it?

 

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[Stargazer]

Ok.

Your registration/start date is for example today. ie when the business started.

The tax accounting period you want to put is 05/04/xx

So any money earned from now until 05/04/20 will be on one tax return, even if it is £100 net and then going forward will be 06/04/20 to 05/04/21 &c

Are you registering as self-employed or are you starting a Ltd Company?

Dan

 

[Deleted74396]

Ok.

Your registration/start date is for example today. ie when the business started.

The tax accounting period you want to put is 05/04/xx

So any money earned from now until 05/04/20 will be on one tax return, even if it is £100 net and then going forward will be 06/04/20 to 05/04/21 &c

Are you registering as self-employed or are you starting a Ltd Company?

Dan

Thank you! That clears it up. It has a DD/MM/YYYY format, but if I put x's they'll know what I mean?

Great advice as ever, I appreciate it!

Ltd company, I'm already registered as self-employed

 

[Stargazer]

You are talking about HMRC knowing what you mean?

Put it in the format they want.

Dan

PS: If you phone Inland Revenue they can send you relevant info packs on whatever you may need. eg Tax, VAT Reg, Employing people &c.

 

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[Mutant]

Ok, it gets confusing because there's the general tax year which runs from 6th April to 5th April the following year, so we're currently in the 19/20 tax year (i.e. 6th April 2019 - 5th April 2020).

However there's a difference with Limited companies, whereby your accounting period could have nothing to April at all! This is why I asked what it was for.

So the rule with Limited Companies (at Companies House! Not HMRC! More on this later) is your first accounting period begins whenever you register the company, & ends at the end of the same month the following year. This means your first year will probably be longer than a year! Then it runs annually from then, so every year is a year. Let's do some examples.

Say you registered on 15th September 2019, a full accounting period would take you through to 30th September 2020. Yes this is more than a year. Yes this is correct (!) That would be your first year. Your second year would run from 1st October 2020 - 30th September 2021. Third year 1st October 2021 - 30th September 2022, & so on.

It doesn't matter when in September you registered the company, the end of the accounting period would be the following 30th September.

Got it?

Ok, time for the mind F*ck one. Starting a company today 5th March 2020 means your first accounting period begins today, & ends a year later, plus a little bit more to the end of the month, so the end of your first accounting reference period would be 31st March 2021.

Your second accounting period would be 1st April 2021 - 31st March 2022.

Yes, this can get confusing because it's so close to the whole 5th/6th April thing. I do the books for one company that was started in a March, & I always have to check what we're referencing when we're talking about "tax year" or the "19/20 year".

Here's the reference: A guide to accounting reference dates and periods - Companies House

Yes you can change your accounting period, but usually with Companies House only by whole months - not so that it lines up with 5th/6th - a limited company's will always run to the end of a month. (Well, almost always. Don't think about it! You don't need to know!) Which yes, hurts my little exacting heart


OH! And don't forget that HMRC & Companies House are separate entities that need different things. I've been talking about Companies House here, but HMRC will also accept you using the same dates as you do for Companies House, which I highly recommend to not confuse yourself further!

However, there your returns cannot cover a period longer than 12 months, so you may need to two tax returns to cover the first accounting period, which yes, means one will be very short. But then they can run in tandem from then on.

There's more to this depending on when you start trading, but I shall just leave the official reference here: Your limited company's first accounts and Company Tax Return
It walks you through with examples.