Change of Accounting Reference Date

At Towerstone Accountants we provide specialist limited company accountancy services for directors and owner managed businesses across the UK. We created this webpage for company owners who want clear guidance on Corporation Tax, including how it is calculated, when it is due, and how it should be paid. Our aim is to help you understand your obligations, avoid penalties, and manage your company tax position with confidence.

Changing a company’s accounting reference date is one of those administrative actions that sounds technical but is actually very practical. In my experience directors usually consider changing their accounting reference date because the current year end no longer suits the business, creates cash flow pressure around tax payments, or clashes with busy trading periods. Sometimes it is driven by external factors such as group alignment or adviser recommendations.

What often catches people out is that while the process itself is straightforward there are strict rules around timing frequency and knock on effects for accounts Corporation Tax and compliance. Get it right and it can make life easier. Get it wrong and it can create confusion missed deadlines or unexpected filing obligations.

In this article I want to explain clearly what an accounting reference date is why you might change it how to do so properly the rules and restrictions involved and the practical implications that directors often overlook. This is written from a real world UK perspective based on how limited companies actually operate rather than abstract theory.

What is an accounting reference date

An accounting reference date often shortened to ARD is the date to which a company prepares its annual accounts. It effectively defines the company’s financial year end for Companies House purposes.

For example if a company has an accounting reference date of 31 March its accounts will normally be prepared up to 31 March each year.

The accounting reference date is set automatically when a company is incorporated and can later be changed if needed.

How the initial accounting reference date is set

When a company is first incorporated its first accounting reference date is automatically set by the registrar.

In most cases

• The first accounting period ends on the last day of the month in which the first anniversary of incorporation falls

For example

• Incorporated on 15 June 2024
• First accounting reference date 30 June 2025

This initial date is often chosen by the system rather than by the director which is why many companies later decide to change it.

Accounting reference date versus Corporation Tax period

One of the most important points to understand is that the accounting reference date is not always the same as the Corporation Tax accounting period.

Companies House accounting periods can be up to 18 months long for the first set of accounts. HMRC Corporation Tax periods are usually capped at 12 months.

This means

• One set of accounts may cover more than one Corporation Tax period
• Multiple Corporation Tax returns may be required for the first year

This complexity is often a reason directors choose to change the accounting reference date early on.

Common reasons for changing an accounting reference date

From experience the most common reasons include

• Aligning the year end with a quieter trading period
• Improving cash flow around Corporation Tax payments
• Aligning year ends within a group of companies
• Matching a personal tax planning cycle
• Simplifying bookkeeping and reporting
• Correcting an inconvenient automatically set year end

There is no requirement to justify the change to Companies House provided the rules are followed.

Who can change the accounting reference date

The decision to change the accounting reference date is made by the directors.

In most companies

• The directors decide
• The change is filed with Companies House

Shareholder approval is not usually required unless the articles of association say otherwise which is uncommon.

How to change the accounting reference date

Changing the accounting reference date is done by notifying Companies House.

This is usually done online and is one of the simpler filings a company can make.

The filing tells Companies House

• The current accounting reference date
• The new accounting reference date

Once accepted the public record is updated.

Extending or shortening the accounting period

When you change the accounting reference date you are either extending or shortening the accounting period.

You can

• Shorten the accounting period to an earlier date
• Extend the accounting period to a later date within limits

The direction of change affects what filings are required.

Rules on extending an accounting period

There are strict limits on how much you can extend an accounting period.

Key rules include

• An accounting period cannot be longer than 18 months
• You can usually extend the period only once every five years
• Extensions are restricted if the company is in administration or liquidation

These rules exist to prevent companies delaying filings indefinitely.

Rules on shortening an accounting period

Shortening an accounting period is generally more flexible.

In practice

• You can shorten an accounting period at any time
• There is no minimum length
• Multiple short periods can be created

This is often used to align year ends or bring matters up to date.

How often you can change the accounting reference date

Companies can change their accounting reference date but not repeatedly without restriction.

The general rule is

• You can change the accounting reference date once in a five year period to extend the period
• You can shorten the period more freely

This prevents abuse while allowing genuine business needs to be met.

How to file the change online

Most companies change their accounting reference date using the Companies House online service.

The process usually involves

• Logging into the company’s online account
• Selecting the option to change accounting reference date
• Entering the new date
• Submitting the change

There is no filing fee for this change.

How long the change takes to process

In most cases the change is processed quickly.

Typical timelines are

• Same day processing
• Within one working day

Once processed the new accounting reference date appears on the public register.

What happens to existing filing deadlines

Changing the accounting reference date changes the deadlines for filing accounts.

This is an area that causes confusion.

In general

• Filing deadlines are recalculated based on the new accounting period
• The first set of accounts may still have special deadlines
• Shortened periods have earlier deadlines

It is important to check the new deadlines immediately after the change.

Impact on Companies House accounts

The most obvious impact is on Companies House accounts.

Changing the accounting reference date may result in

• Short accounts
• Extended accounts
• A different filing timetable

You must ensure the accounts you prepare match the revised period exactly.

Impact on Corporation Tax and HMRC

Changing the accounting reference date does not automatically change Corporation Tax periods.

Corporation Tax is administered by HM Revenue and Customs and has its own rules.

Key points include

• Corporation Tax periods are usually limited to 12 months
• An extended Companies House period may require two CT600 returns
• HMRC must be informed of the accounting period covered

This is why tax planning should be considered alongside the change.

Cash flow implications of changing the year end

One of the main reasons directors change the accounting reference date is cash flow.

Changing the year end can

• Bring forward or delay Corporation Tax payment dates
• Shift when accounts are prepared
• Align tax payments with stronger cash periods

However extending the accounting period does not delay Corporation Tax indefinitely. Corporation Tax is still due nine months and one day after the end of each Corporation Tax period.

Changing the accounting reference date in the first year

The first year is often the best time to change the accounting reference date.

Reasons include

• More flexibility
• Fewer historic filings to consider
• Ability to simplify future reporting

Many advisers recommend reviewing the accounting reference date shortly after incorporation rather than leaving it to chance.

Changing the accounting reference date for group companies

In group structures it is common to align accounting reference dates.

Benefits include

• Simplified consolidation
• Easier group reporting
• Streamlined tax planning

Each company in the group must still file its own change but alignment can significantly reduce complexity.

Changing the accounting reference date when a company is dormant

Dormant companies can also change their accounting reference date.

This may be done to

• Align with other companies
• Simplify future reactivation
• Correct an inconvenient date

Dormancy does not prevent a change but filings must still be made correctly.

Common mistakes I see directors make

Over the years certain mistakes come up repeatedly.

These include

• Assuming HMRC deadlines automatically change
• Extending the period beyond 18 months
• Missing revised filing deadlines
• Changing the date without considering tax impact
• Confusing accounting periods with tax years

Most of these issues are avoidable with a bit of planning.

Does changing the accounting reference date affect VAT

Changing the accounting reference date does not directly affect VAT return periods.

VAT periods are set separately and usually remain unchanged.

However aligning year ends can help with

• Annual VAT accounting
• Reconciliations
• Reporting consistency

This should be reviewed separately.

Does changing the accounting reference date affect payroll

Payroll reporting is not directly affected by a change in accounting reference date.

PAYE operates on tax years and reporting periods that are independent of the company year end.

However year end alignment can help with internal reporting and planning.

When not to change the accounting reference date

Changing the accounting reference date is not always beneficial.

It may not be appropriate where

• Accounts are already in preparation
• Deadlines are imminent
• The change would create unnecessary complexity
• There is no clear benefit

Changes should be purposeful rather than cosmetic.

Record keeping and documentation

When a change is made you should keep clear records.

This includes

• Evidence of the decision
• Confirmation of the filing
• Updated schedules and deadlines

Clear records help avoid confusion later.

The role of professional advice

While changing the accounting reference date is simple the implications can be less so.

An accountant can help with

• Assessing tax impact
• Planning cash flow
• Managing filing deadlines
• Coordinating Companies House and HMRC obligations

Advice is particularly valuable where periods are being extended.

Practical example of a change

For example a company incorporated in May with a default year end of 31 May may find this clashes with its busiest period.

By shortening the first period to 31 March

• Accounts align with the tax year
• Year end falls in a quieter period
• Future planning becomes easier

Small changes like this often have outsized benefits.

Final thoughts from experience

Changing an accounting reference date is one of the most underused planning tools available to limited companies. It is simple to do and can make compliance and cash flow far easier when used thoughtfully.

In my experience the best time to review the accounting reference date is early in the life of a company or when circumstances change. Leaving it on autopilot often leads to avoidable pressure at inconvenient times.

As with most administrative decisions the key is understanding the wider impact rather than just completing the form. Done with intent a change of accounting reference date can quietly improve how a business runs year after year.

You may also find our guidance on how to pay corporation tax and when is corporation tax due useful when dealing with related Corporation Tax questions. For a broader overview of Corporation Tax rules and support, you can visit our corporation tax help hub.