Off the shelf companies
Discussion
Hi ,
I am thinking of buying an off the shelf company that was registered with companies House on 31/07/2019 but has not been traded. Will my year end and company tax year end be twelve months from the date of original registration or will it be twelve months from when I commence trading it ?
Many thanks
I am thinking of buying an off the shelf company that was registered with companies House on 31/07/2019 but has not been traded. Will my year end and company tax year end be twelve months from the date of original registration or will it be twelve months from when I commence trading it ?
Many thanks
There will already be a formal financial year end date set when the company was incorporated. If you know the name of the company you want to buy, have a look at its entry on the Companies House website and you will see the financial year end date that has already been set.
If you don't like that year end, you can arrange to have the year end changed. However, you may also need to contact HMRC to have the year end changed with them too because they will be issuing Corporation Tax return notices based on the year end already set.
Alternatively, just set up a company yourself using one of the bespoke company formation agents such as Jordans or Stanley Davies. They can be extremely cheap (under £50). The beauty of this is that you can stipulate the year end you want from the start.
If you don't like that year end, you can arrange to have the year end changed. However, you may also need to contact HMRC to have the year end changed with them too because they will be issuing Corporation Tax return notices based on the year end already set.
Alternatively, just set up a company yourself using one of the bespoke company formation agents such as Jordans or Stanley Davies. They can be extremely cheap (under £50). The beauty of this is that you can stipulate the year end you want from the start.
fakenews said:
Off-topic Eric but is there a sweet-spot for the financial year end re tax etc for a company?
Depends on what you are after as to what constitutes a "sweet spot". For people like me (accountants), year ends that match the Corporation Tax year (i.e. 31 March) make life easier for a number of reasons.i) they match the Corporation Tax year
ii) they match the normal tax year pretty closely (i.e 5 April)
This makes life easier for aligning Corporation Tax returns with the company accounts - especially in the first period of trading. It's not such a big deal for subsequent years.
More importantly, it makes reconciliations of payroll data in final accounts with the payroll submissions to HMRC easier as balances and totals will align more readilly.
It also makes life a bit easier when planning dividend amounts in the company accounts and reconciling them with data that is included on directors'/shareholders' personal tax returns.
However, if you are running a business, you may have other non-tax reasons to have a year end that is not 31 March.
Eric Mc said:
Depends on what you are after as to what constitutes a "sweet spot". For people like me (accountants), year ends that match the Corporation Tax year (i.e. 31 March) make life easier for a number of reasons.
But from the customer's point of view accountants are always snowed under with work at that time of year and as the maths ends up the same whenever your year ends you might be better served with a different date.Ean218 said:
But from the customer's point of view accountants are always snowed under with work at that time of year and as the maths ends up the same whenever your year ends you might be better served with a different date.
Only if the client (or the accountant) is leaving things to the last minute for filing. If the client can present the figures to the accountant soon after their year end there's no reason why the accountant couldn't have everything ready for submission at least six months ahead of the filing deadlines.Eric Mc said:
Only if the client (or the accountant) is leaving things to the last minute for filing. If the client can present the figures to the accountant soon after their year end there's no reason why the accountant couldn't have everything ready for submission at least six months ahead of the filing deadlines.
Yes, the end of the financial year is nowhere near the submission date for the accounts - any decent accountant will spread out their workload.Eric Mc said:
Only if the client (or the accountant) is leaving things to the last minute for filing. If the client can present the figures to the accountant soon after their year end there's no reason why the accountant couldn't have everything ready for submission at least six months ahead of the filing deadlines.
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