What is my company’s accounting reference date?
If you’re asking this question, you’re already ahead of many business owners who never give this crucial date a second thought.
But here’s the thing – your accounting reference date (ARD) isn’t just administrative paperwork – it’s a small detail that could make your business look bigger and better, or simply make your entrepreneurial life significantly easier.
Understanding Your Accounting Reference Date
Your accounting reference date is the date up to which your company must prepare accounts every year.
It’s essentially your company’s financial year-end, and it’s automatically assigned by Companies House when you incorporate your business.
Here’s how it works as an example: if you form a company in January, Companies House will automatically give you an accounting reference date of 31st January.
So if you incorporated on the 10th of January 2025, your first accounts will cover the period up to 31st January 2026.
This happens automatically – it’s simply the default system where your year-end matches the month in which you formed your company.
And as government sources confirm most business owners simply accept this.
| COMPANY INCORPORATED EXAMPLE | DEFAULT ACCOUNTING REFERENCE DATE |
| 7th January 2025 | 31st January 2026 |
| 23rd June 2025 | 30th June 2026 |
| 1st December 2025 | 31st December 2026 |
Why Your Accounting Reference Date Can Matter More Than You Think
But while you get a default year-end that’s approximately 12 months from when you started, changing your accounting reference date can have significant strategic benefits.
The first year of your business is particularly crucial for making this decision, though you can change it later if circumstances require.
And here are just a few scenarios to highlight where a change of ARD can help.
Aligning with Your Business Cycle
Not all businesses operate on the same cycle.
If your business has seasonal patterns, you’ll want your accounting reference date to work with your natural rhythm, not against it. For example:
- Calendar year businesses might benefit from changing to 31st December instead of their incorporation month
- Education sector companies often find 31st July more suitable as it aligns with the academic year
- Retail businesses meanwhile might want to avoid year-end during their busiest trading periods.
Think about it practically: if April is your biggest sales month, why would you want to be preparing accounts during that critical period?
You want to focus on maximizing sales, not adding administrative burdens to your plate.
First Impressions Matter: The 18-Month Strategy
Here’s another strategic consideration many new business owners miss: your first set of accounts must be at least 6 months long but can be up to 18 months in length.
This flexibility creates an opportunity.
If your business started slowly but has been growing consistently, choosing an 18-month first accounting period could showcase a more impressive profit figure.
When suppliers, customers, or potential investors look at your accounts, that first impression matters.
And a longer period with 18 months of trading could present your business as more established and profitable.
It’s important to note though that this strategy does require careful tax planning, as corporation tax calculations follow different rules for extended periods.
Additional Timing Considerations For Your Accounting Reference Date
VAT Alignment
Consider whether you want your year-end to coincide with your VAT quarters.
This alignment generally makes administration easier and reduces the complexity of your financial management.
Group Companies
If you have multiple companies or subsidiaries, having the same year-end across all entities makes consolidated accounting much simpler and is generally required for producing group accounts.
Cash Flow Management
The timing of your year-end affects when you need to pay corporation tax (9 months after the year-end).
Strategic timing can help with cash flow management, especially if you have seasonal income patterns.
The Power of Conscious Decision-Making
Many successful business owners discover this flexibility years into their journey and wish they’d known about it from the start.
As one recruitment business owner we know recently discovered after three years of operation, simply changing your accounting reference date to align with how you naturally think about your business (like calendar years) can make life significantly easier.
The key is making conscious decisions rather than simply accepting defaults.
While changing your accounting reference date might seem like a small detail, these small decisions compound over time.
They can either work for you or against you, and given everything else on your plate as a new business owner, why not make this simple choice work in your favour?
Taking Action
Your accounting reference date is one of the few aspects of business administration where you have complete control and can make the system work for you rather than the other way around.
Whether you’re looking to align with your business cycle, present stronger financials, or simply make your administrative life easier, this is a decision worth considering carefully.
Don’t let this be another case of “you don’t know what you don’t know.”
Take a moment to consider what accounting reference date would work best for your business, and remember – if you get it right from the outset, you’ll benefit from that decision every year going forward.
The choice is yours, and it’s simpler to implement than you might think.
Can You Change Your Accounting Reference Date?
Yes, you absolutely can change your accounting reference date, and it’s surprisingly straightforward.
However, there are some rules to understand:
- You can shorten your year-end as often as you like
- You can extend it by up to 18 months, but only once every 5 years (unless there are special circumstances)
- You cannot change it after your accounts become overdue.
Changing Your Accounting Reference Date: The Process
The actual process of changing your accounting reference date is remarkably simple. Through Companies House’s online system, you can:
- Access the “change accounting reference date” option on your company’s filing page
- Select whether you want to change the current or previous accounting period
- Enter your preferred new date
- Confirm the change.
That’s it – the change is immediate and official.
Before You Go …
Your company’s accounting reference date relates to the one of the two main documents every UK limited company needs to send to Companies House every year – Annual Accounts.
The other is the ‘Confirmation Statement’ and to find out more about these two main filing requirements check out our next post.
Companies House Filing Requirements – What Does a Limited Company Need to File Every Year?
