Changing Your Accounting Reference Date (AA01): The UK Guide

What an accounting reference date is

The accounting reference date is your company's year end. The financial period ends on the accounting reference date, and the length of period running up to it is called the accounting reference period. Together they determine the financial year that your annual accounts must report on. Companies House sets an ARD for every company automatically, so you always have one from the day you are formed.

Under section 391 of the Companies Act 2006, the default first accounting reference date for a company formed today is the last day of the month in which the anniversary of its incorporation falls. So a company incorporated on 11 May would be given an accounting reference date of 31 May the following year. After that first year, the ARD recurs on the same date every year, giving standard twelve month accounting periods, unless you change it.

The first accounting reference period is a special case. Section 391 sets it as a period of more than six months but not more than eighteen months, beginning with the date of incorporation and ending on the accounting reference date. That is why a company's very first set of accounts usually covers a bit more than a year rather than a neat twelve months.

Which period you can change

You cannot rewrite history at will. Section 392 of the Companies Act 2006 lets a company notify the registrar of a new accounting reference date, but only for the current accounting reference period or the one immediately before it. In the words of the Companies House guidance, you can only change the ARD for your company's current financial year or the one immediately before it. Older, settled periods are off limits.

The notice you give must say whether the period is to be shortened or extended so that it ends on the first or second occurrence of the new date you have chosen. In plain terms, you pick the new year end, and you tell Companies House whether that new date pulls the current period in or pushes it out.

This is why timing matters. A change made in good time can tidy up the period you are currently in or the one just gone. Leave it too late, and the period you wanted to adjust may no longer be one you are allowed to touch.

Shortening your year end

Shortening is the easy direction. You can shorten your company's financial year as many times as you like, and the minimum you can shorten it by is one day. There is no five year cooling off period and no cap on how often you do it. If you want to bring your year end forward, for a genuine commercial reason or to line up with a group, the mechanics are straightforward.

There is one important practical consequence of shortening. Cutting the period short usually pulls your filing deadline forward too. When you shorten an accounting period, the time you have to file your accounts is recalculated, so it is possible to shorten a period and find that the accounts are due much sooner than you expected. Always work out the new deadline before you commit to the change.

Used sensibly, shortening is a useful tool. Companies commonly shorten by a single day to move a year end off an awkward date, or by a few weeks to align with a new parent company. Because the rules are so permissive, the discipline is entirely about managing the deadline that follows.

Extending your year end

Extending is tightly restricted, and for good reason. A longer period means shareholders and the public wait longer for accounts. Section 392 of the Companies Act 2006 imposes two hard limits. First, an accounting reference period may not be extended so as to exceed eighteen months, and a notice is ineffective if the period as extended would exceed that limit. Second, you generally cannot lengthen a period if it means giving a notice less than five years after the end of a period that was previously extended by notice.

There are defined exceptions to the five year rule. A more frequent extension is allowed where the company is in administration, where you are aligning the date with that of a subsidiary or parent undertaking established in the European Economic Area, or where the Secretary of State directs otherwise. Outside those situations, the once in five years restriction stands, so plan any extension carefully.

The eighteen month ceiling is absolute in normal circumstances. It caps how far you can stretch a single accounting period, which in turn caps how long the resulting accounts can run. If a proposed change would breach either the eighteen month limit or the five year restriction, the notice simply has no effect, and your existing ARD stays put.

When you cannot change the date at all

There is one situation where the door is firmly closed. Under section 392 of the Companies Act 2006, a notice may not be given in respect of a previous accounting reference period if the period for filing the accounts for that financial year has already expired. Companies House puts it more bluntly: you cannot change your company's year end when its accounts are overdue.

In other words, once the filing deadline for a period has passed, that period is fixed. You cannot reach back and shorten or extend it to buy time or to change the picture the accounts present. This stops companies from using a late ARD change as a way to sidestep a missed deadline or an emerging late filing penalty.

The lesson is to act early. If you know you want to move your year end, decide before the relevant filing deadline arrives. A change made in time is routine. A change attempted after the deadline for that period has passed will simply be rejected.

How to change the ARD using form AA01

Changing the accounting reference date is done by giving notice to the registrar. The quickest route is the Companies House online service, which validates the change as you go. Alternatively you can complete and post form AA01, the change of accounting reference date form, which asks for your company name and number, the current ARD, the new date, and whether the current or previous period is being shortened or extended.

Before you file, confirm two things. First, that the period you want to adjust is one you are allowed to change, meaning it is the current period or the one immediately before it, and that its filing deadline has not already passed. Second, that any extension respects both the eighteen month ceiling and the once in five years rule. Getting these wrong means the notice has no effect, even if the form itself is accepted.

A final point that is easy to forget: if the change alters the length of your financial year, you must also update your accounting period dates with HM Revenue and Customs. Companies House and HMRC do not share this automatically, so tell HMRC separately to keep your Corporation Tax records aligned with your new year end.

The effect on your filing deadline

Changing the ARD does not just move your year end, it moves the deadline for filing your accounts. The normal deadlines run from the accounting reference date: nine months after the ARD for a private company, and six months after the ARD for a public company. Move the ARD and those clocks move with it.

There is an important protection when you change the date. Where you shorten or extend an accounting period, the new filing deadline becomes the longer of two options: the standard nine months for a private company, or six months for a public company, from the new accounting reference date; or three months from the date Companies House receives the notice of the change. That three month floor stops a change from leaving you with an impossibly short window to file.

One thing a change does take away is any filing extension you had already been granted. Companies House is clear that if you already have an extension to file your accounts, changing your ARD may cancel it, so any existing extension will no longer apply. Late filing penalties can still bite if the recalculated deadline has already passed, which is another reason to run the new dates before you file the AA01.

Conclusion

Changing your accounting reference date is a genuinely useful tool, but it rewards planning over improvisation. Shortening is unrestricted: you can do it as often as you like, down to a single day, which makes it the natural choice for tidying a year end or aligning with a group. Extending is the guarded direction, capped at eighteen months and generally allowed only once every five years, with a short list of exceptions for administration, EEA parent or subsidiary alignment, and directions from the Secretary of State.

The two mistakes to avoid are trying to change a period whose filing deadline has already passed, which the law does not permit, and forgetting that a change recalculates your deadline and can cancel an existing filing extension. Work out the new deadline first, respect the three month floor that protects you, and remember to tell HMRC if the year length has changed. If you are setting up and want your year end and filing calendar right from day one, see how Nasara Connect helps you start a company, or talk to our team about aligning your accounts with a wider group structure.

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