Advice needed on picking a financial year end

arch9

Hi, I'm starting my own business and will be looking to incorporate a limited company soon. From my research, it seems that picking 31 March (or 5 April) as the company's financial or accounting year end is the simplest, since that date coincides with the end of the UK tax year. But does that mean if I were to incorporate around mid-Feb, I'd have to get my company tax filings in order within 6 weeks/by 31 March to submit to HMRC? I know that I'll be very busy in the first few months of starting my business and worry that I won't have much capacity to figure out tax filings as well in the initial period.


In another country where I've done business, this was not an issue as your company needs a minimum of 12 months of being in business before the first tax filings are due. Would really appreciate clarity on the above for the UK, as I'm wondering if it's worth incorporating the company after early April...


Thanks in advance for any insights!

00ec25

you are asking for facts that can be googled
what happens in another country is irrelevant

https://www.churchill-knight.co.uk/blog/2016/10/i-have-a-limited-company-when-are-my-annual-accounts-due/

if you have not even started trading yet, why are you looking to incorporate "immediately"?

Go to talk to a UK accountant and find out from them what your most tax efficient situation (sole trader or Ltd) will be, as they will need a lot more financial info about your circumstances and expectations to advise you, than you can give on here.

For example. it is not unusual to have a "long" (or "short") first accounting period for a company, but of course the company does still need to submit a corporation tax return covering no longer than 12 months, so may need to do 2 tax returns and one set of accounts. That is why you need an accountant for a company, not a DIY effort after 5 minutes of "research"

tebthereb

I think that a lot of people go with December or 31 March / 5 April year ends due to the alignment with the personal tax year end of 5 April.

Whilst this gives some simplicity it can also be more expensive as most accountants will be swamped at the same time of year doing all three accounts.

Having a year end that is not co-terminus with personal tax can also provide some more flexibility around timing of tax. It depends on your situation.

Depending on when your profits/losses fall (ie month to month) the year end can also provide opportunity to accelerate or decelerate tax payments.

Assuming you will be engaging an accountant to assist with your financial statements, I would suggest talking with them as there are lots of variables.