Should you have your company accounts year end the same as the personal tax year?
Author: Russell SmithSeptember 15, 2015
One of the confusing things about becoming a limited company is that your company year end for your accounts is different to your personal tax year.
Your personal tax year is 5 April 2015 (if you want to know why it is 5 April and not 31 March or even 31 December, then buy me lunch sometime and I’ll take an hour of your life telling you a heady tale of eighteenth century leaders miscalculating leap years), everyone’s personal tax year end is the same.
However, your company year end is different, it will depend on the date that you set up your company. The rules are that you round up to the nearest month end and then add on a year so for example:
Set up company on 15 September 2015
Company year end 30 September 2016
Set up company on 2 December 2015
Company year end 31 December 2016
I’m sometimes asked whether or not it is possible to change the company year end to align with the personal tax year. It is possible to change to 31 March (almost aligning with 5 April) which does make it nearer.
However, I don’t always recommend it since it makes it harder for you to compare your financial performance since you will have a long or short period compared to a 12 month period. There can be advantages for tax planning of having different year ends as well.
If you would like to know more about changing your year end email me at email@example.com.