How to choose your company's year-end date

Step 1: Understand the default

Companies House sets your first accounting reference date to the end of the month you incorporated in. It is a default, not a recommendation — many companies keep it out of inertia when a different date would serve them better.

Step 2: Consider your trading cycle

A year end just after your busiest period means your accounts capture a full trading cycle and you value stock when it is lowest. A quiet-season year end also frees time for the year-end process when you are not flat out.

Step 3: Think about tax timing

Your year end sets when corporation tax falls due and when profits are taxed. Aligning it thoughtfully can defer a tax payment or align profit recognition with your plans. It also interacts with the personal tax year for director pay.

Step 4: Know the rules on changing it

You can shorten your accounting period as often as you like, but lengthening it is restricted — generally once every five years and to no more than 18 months. Plan any change deliberately, because it shifts all your deadlines.

Step 5: Get advice on the switch

Changing year end has knock-on effects on filing and tax, so run it past your accountant. Keeping cash flexible through any transition helps.

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