I look after a company which was incorporated on 2 October 2014. Companies house show first accounts to be made up to 31 October. (My accounting software has been set up on the basis of the year end being October!)
Accountant INSISTING because the company was incorporated on 3rd (he says!!! despite it showing as 2nd) then the year end is 30 September.
I didnt think this could be correct unless of course you opted for a change of year end date, which should already be showing at companies house?
Can someone enlighten me please?
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
You can change the company year end date on companies house, and dependant on which software you have, you can adjust the year end on there, too. I usually change all my clients to 31 March year end, so that it runs in line with all the other tax years... you'd need to review the profit for dividends anyway, so its usually worthwhile.
You can check the auto year end that companies house have issued on webcheck.
If you incorporate mid month then the date for companies house purpsoes is set as the last day of the month. (www.legislation.gov.uk/ukpga/2006/46/section/391). That sets the date that your accounts must be made up to.
If however HMRC were informed that you started trading on the 2nd/3rd of October then you are effectively setting your period for HMRC from the end of the previous month.(www.legislation.gov.uk/ukpga/2009/4/section/10). Setting your period of accounts for tax purposes.
The common approach is to start trading the first of the month after incorporation.
If you started trading on the date of incorporation and that was mid month then you need to reallign your dates.
The accountant will be able to align the dates moving the filing date back from the 31st of October to the 30th of September (as the 30th of September has not yet passed) to bring them into allignment. (form AA01 which can be filed on line).
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Hi Michelle
I probably shouldve made myself clearer in that this Accountant takes every little opportunity to undermine me - every accusation that has been levelled, Ive proved him wrong but its wearing a bit thin now. I checked companies house for the auto year end and incorp date before my first response to him and I am aware you can change your year end but dont you normally have to notify Co House before it happens OR can you alter it as you send the accounts in? I wanted to get my facts right before I have a bit of a rant at this guy ( I know I shouldnt have a rant but given the history this is the straw that broke the camels back, so Im going to! Plus the fact that my clients are treating me like a mushroom! in Part because of the snotogram I got back - Im absolutely fuming -its as if I should know what they are doing without being told. My crystal ball unfortunately broke a few months ago with this lot. )
They have sage 2013 so should be able to change the date.
Aaaggghhhh.
(Sorry!)
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
If you incorporate mid month then the date for companies house purpsoes is set as the last day of the month. (www.legislation.gov.uk/ukpga/2006/46/section/391). That sets the date that your accounts must be made up to.
If however HMRC were informed that you started trading on the 2nd/3rd of October then you are effectively setting your period for HMRC from the end of the previous month.(www.legislation.gov.uk/ukpga/2009/4/section/10). Setting your period of accounts for tax purposes.
The common approach is to start trading the first of the month after incorporation.
If you started trading on the date of incorporation and that was mid month then you need to reallign your dates.
The accountant will be able to align the dates moving the filing date back from the 31st of October to the 30th of September (as the 30th of September has not yet passed) to bring them into allignment. (form AA01 which can be filed on line).
Thank you Shaun - good point about the tax/HMRC angle and one I did wonder about, but I have to admit to thinking that the year end date change wouldve have to have been done already with companies house. My mistake, so I will tone the email down....but it still goes back to them not telling me the correct information when I started so now Sage is wrong.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
To change the year end, you would sign into Companies House, using the company number and companies house authentication code. From there you can shorten or lengthen (tho not more than 18 months).
If you shorten the year end, the filing date will be 9 months later, so may pull the filing date forward.
If you lengthen the year, you do not get any extra time to file, the original date will stand.
Once a set of accounts are late, I dont think you can change the year end. So, for example, if you wanted to shorten the year end to March 2016, you could do it during April-Dec, making sure the accounts were filed by 31 Dec. If December passed, I don't think you can do it.
Never underestimate the condescending arrogance of some accountants.
Sounds as though this one may have a confrontation involving both barrells at some stage in the future but this isn't the one to have the maelstrom response over as it sounds as though they are right but they could have been a little more helpful with their explanations when this business was first setting up.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
What I dont understand is, why is the accountant insisting the year end date is September, if you can see its not.. surely they should be simply informing you that they are going to change it to Sept and asking you to do the same with Sage?
But Jo's just bringing the filing date back by one month and she's currently still got six days to get it sorted in.
If this was a more complex scenario I would be adverse to giving advice on site due to the potential tax connetations but in this instance it does seem relatively straight forwards with Sage being the biggest headache involved.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I am guessing then they will alter the year end with companies house when they file. Ive been back through everything I have and it shows trading started in November, but Ive been kept out of the loop so many times, that I really shouldnt be surprised nor wound up by it now.
The both barrels and an extra gun email has been sent already.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Companies act 2006 (31st of October is correct) vs Corporation tax act 2009 (30th of September is correct).
I agree, the accountant should be telling Jo that her dates are changing (with explanation as to why) rather than debating the matter.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
As I understand it, you can change the year end once the date you want has passed, but not if the accounts are late. So you couldn't change a 31.03.15 auto year end, if it was say 05.01.16.
If the company left the year end as 31 October, it would have a stub return for 3-31st
3 Oct 14 to 2 Oct15 - 12 months - (a)the ending of 12 months from the beginning of the accounting period
3 Oct 15 to 31 Oct 15 - 29 days - (b)an accounting date of the company
If the year end is shortened to 30 Sept, it would prepare a return for 3 Oct 14 to 30 Sept - (b)an accounting date of the company
If they started trading on 1st November, then it would prepare a return for 1 Nov 14 to 31 Oct - this would be (a) and (b)
I dont see why the accountant is making a fuss... if the year end was kept at the end of October, they would input the October accounts figures into their software and that would work out the necessary apportionment and create the stub return from that
I feel that you're over complicating it Michelle (that's normally my job!).
Accounting period was moved forwards by the companies act for accounts filing purposes and moved back by the Corporation tax act for tax filing purposes.
All that needs to happen is the companies house accounting period is aligned back the Corporation tax period so moved from the 31st of October back to the 30th of September.
Because neither date has yet been hit that can be done relatively easily with little faffing around.
The 2nd/3rd date has real no relevance to the scenario.
The accountant is making a fuss because they want the dates in allignment and the date to allign to is the earlier one.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
If the accountant moves the year end forward, the tax return period end date moves forward and a shorter tax return period is created. I'm just trying to explain to Jo how your link ties into the situation (cos its complicated to look at ) and the possible situation that Jo mentions, where trading date starts in November. The accountant can align in all scenarios, which was my trying to give Jo a complete understanding of how it works.. that's what I am here for after all! There is no requirement to move the year end forward for tax purposes, you just create a stub as mentioned above. The accountant is creating the issues with his insistence of what it "should be" rather than what he would prefer. So now she has the know-how to go back and tell him how it is, if she wants to. GO JO! KICK ASS!!
Ironically, I've just come to do one of my rare CT returns and have dates of 28th March 2014 - 27th March 2015 and 28th March 2015 - 31st March 2015 so I have a very small loss on the 1st one and about a grand profit on the second one.
It seems a bit daft to do it that way as I would have assumed short period to 31/3/14 would have been better. I've got use of home, accountancy fees and depreciation in that last 3 day period. Is that ok or am I best moving them to the 27th March, to reflect the period rather than the year end?
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
You do the accounts to 31 March and then apportion for 365/369 and 4/369 for your tax return periods. If you are using software, it will do it for you.
You do the accounts to 31 March and then apportion for 365/369 and 4/369 for your tax return periods. If you are using software, it will do it for you.
Thanks Michelle, think I'm going to use software for the first time. Eek. Just had a brief perusal and Andica looks best for my needs, I can buy a licence to do 5 which will work out at less than £20 each for the 4 that I do.
And apologies to Joanne for hijacking her thread
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Andica is really good software, John. I was going to get that but Sage gave me a good deal.. might move over when that runs out! Let me know if it does the apportionment!!
I can't see that it does, but the software is alien to me and I'm having a little difficulty understanding it.
Andica don't like answering their phone so I'm stuck now I was hoping to just attach the ixbrl file from VT final accounts and let the software do it's magic.
Will do this one manually using HMRC with the 369 day split you suggested.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Its not over complicating, its just what you do
) and the possible situation that Jo mentions, where trading date starts in November. The accountant can align in all scenarios, which was my trying to give Jo a complete understanding of how it works.. that's what I am here for after all! There is no requirement to move the year end forward for tax purposes, you just create a stub as mentioned above. The accountant is creating the issues with his insistence of what it "should be" rather than what he would prefer. So now she has the know-how to go back and tell him how it is, if she wants to. 
GO JO! KICK ASS!! 
I was hoping to just attach the ixbrl file from VT final accounts and let the software do it's magic.
