When launching or managing a limited company, one important yet often overlooked decision is selecting the right accounting year end date. It’s more than just a formality. It affects your company tax return, cashflow, timing of tax payments and even how much tax you pay in the short term.

At Horsfield & Smith, we work with businesses across Bury and Greater Manchester to get these decisions right, from accounting periods for corporation tax to annual accounts filing annual accounts with Companies House and HMRC. Here’s what you need to know before choosing or changing your year end.

What is an accounting year end date?

Your accounting year end (also known as your accounting reference date) is the final day of your company’s financial year. It’s the date up to which you’ll prepare your annual accounts and report your corporation tax liabilities.

When you first register your company, Companies House will automatically set this date as the last day of the month in which your company was incorporated, unless you choose to change it. For example, if you registered on 7 April 2025, your year end would default to 30 April each year.

Should you stick with that date?

Why your accounting year end date matters

The timing of your year end can impact:

  • When you need to file your confirmation statement and company tax return
  • Whether you benefit from overlap relief or suffer from bunching of terminal profits
  • Your cashflow — particularly the timing of payments on account
  • The complexity of your accounts, especially if your business or sector experiences seasonal variation
  • Your ability to plan for tax liabilities and deductions effectively

How profits impact the best date to choose

One often-missed consideration is the pattern of profits. Here’s how it works:

  • If your profits are rising year on year, it may be beneficial to have an early accounting year end (e.g. 31 March or 5 April). This can delay tax on increasing profits and improve short-term cashflow.
  • If your profits are falling, a later year end (e.g. 30 September or 31 December) may reduce your tax burden more quickly.

While this won’t change your total tax liability over the long term, it can significantly affect when you pay and therefore impact your cash reserves.

Common dates to consider

For simplicity, many business owners align their accounting year end with the tax year, which runs from 6 April to 5 April the following year. Opting for 31 March or 5 April has several benefits:

  • Aligns with HMRC reporting.
  • Makes it easier to compare financial years.
  • Simplifies year-end processes.

However, for seasonal businesses, it may make more sense to choose a date after the busiest period – giving more time to finalise accounts and assess stock positions.

Changing your accounting year end

If your business circumstances change or you believe another date would suit better, you can request a change of accounting year end by filing a form with Companies House. You can:

  • Shorten your financial year as often as you like.
  • Lengthen your company’s financial year (but usually only once every five years), to a maximum of 18 months – unless you get permission from Companies House.

Do note that a year longer than 12 months will lead to two corporation tax accounting periods, as HMRC limits these to 12 months. That means two company tax returns will be required.

Miss a filing deadline and you could face a filing penalty – another good reason to plan your year end carefully.

Real-world considerations

When helping clients set or change their accounting dates, Horsfield & Smith’s business advisory team looks at:

  • Tax year alignment – especially for sole traders transitioning to limited companies.
  • Corporation tax rate changes – to legally minimise tax liabilities.
  • VAT quarters and alignment with payroll or other admin cycles.
  • Whether a date will delay or bring forward key reporting.
  • Cashflow management for seasonal revenue spikes.

In all cases, we recommend that you seek independent professional advice—particularly when looking to change an established accounting structure.

Compliance, corporation tax & reporting

Your accounting periods for corporation tax start the day after your accounting year ends. For instance, if your year ends on 30 June 2025, your next tax period begins 1 July 2025.

It’s important to:

  • Understand how the day after your accounting year end affects your company’s tax obligations.
  • File your annual accounts and confirmation statement on time.
  • Keep your company’s accounting records accurate and accessible.

If your year end date falls close to major legislative changes, tax rate shifts, or new allowances, it could influence whether you qualify in time so strategic planning is vital.

Horsfield & Smith’s perspective

We’ve advised clients on every kind of setup, from fast-scaling SMEs using bespoke app advisory solutions, to manufacturers implementing Flowlens software, to high-turnover service firms.

In each case, we tailor the advice based on:

  • Business growth trajectory.
  • Personal and corporate tax interaction.
  • Long-term plans for business sale, exit strategies or raising finance.

Choosing your year end is never a standalone decision. It sits at the intersection of tax, compliance, and long-term business strategy. That’s where our experience really counts.

Next steps

If you’re unsure about your current accounting year end or you’re starting a new business and want to get it right first time. Talk to our advisory team today.

Call us on 0161 761 5231 or email theteam@horsfield-smith.co.uk.