saving accountancy fees

[london calling]

I formed a new company in february 2009, it has been dormant and I am ready to start trading on monday.

Should I change the year end date to tomorrow and then file the year end return next week so the new trading year will start around 1st july the benefit being it will be 12 months rather than 8 months so I will get more value ie 12 months instead of 8 months transactions for the year end accountancy fee?

Or will I still have to have accounts prepared for the first 12 months to feb 2010 because it is a new company ?

 

[elaine@cheapaccounting]

if you change the year end you will still need to prepare accounts from start of trade to year end although the first part of the year will have no transactions.

 

[london calling]

So if i change the year end from feb to july in fact it will make it worse because i will need accounts for year ending feb 2010 and year ending july 2010, correct ?

 

[wood1e2]

I wouldn't bother, keep the trading year as it is!!!

 

[Davem1234]

If you really wanted, you could change the year end to this Sunday (i.e. the day before you start to trade) and then run the accounts to the anniversary of this date each year.

Its tidier and sometimes simpler to have a year end at the end of a month so you could instead have a 31 May year end.

However, if you stick to having a February year end and therefore the accounts would include a few months of no transactions, surely your accountant would reflect this in his fees for the first year. If so you need not make any changes to the year end.

I hope that helps.

Dave

 

[MyAccountantOnline]

I wouldnt bother - I really dont think you'd save much if anything really in fees.

 

[Blackberry]

If you really wanted, you could change the year end to this Sunday (i.e. the day before you start to trade) and then run the accounts to the anniversary of this date each year.

The first accounting period needs to be a minimum of 6 months long, regardless of whether you have traded or not, so this is idea out.

Just keep things as they are, it really won't (or shouldnt! ) make a great deal of difference to you accounting fees, after all if nnothing happened, there is nothing to account for!

 

[elaine@cheapaccounting]

My advice - concentrate on the business and getting sales. Then the accountants fee will seem like peanuts when you make huge profits!

Good luck

 

[london calling]

ok i will leave the accounting period as it is. Thankyou all for your help

 

[Jaydee]

The first accounting period needs to be a minimum of 6 months long, regardless of whether you have traded or not, so this is idea out.

This is, I believe, a very common misconception.

I think this is because s.224(4) CA 85 and s.392(5) CA 06 both say:

"A company's first accounting reference period is the period of more than 6 months, but not more than 18 months, beginning with the date of incorporation and ending with its accounting reference date."


However

s.224(5&6) CA 85 and s.392(6&7) CA 06 go on to say:
"...subject to the provisions ... relating to the alteration of accounting reference dates and the consequences of such alteration."

So the bottom line is that the first accounting period can be as short as 1 day, and indeed we have shortened many clients' first ARDs to less than six months with no adverse comment from either Companies House or HMRC.

All of the above is a slightly off-topic aside - and for the OP, I would not suggest changing the ARD purely to save accounting fees.

 

[David Griffiths]

All of the above is a slightly off-topic aside - and for the OP, I would not suggest changing the ARD purely to save accounting fees.

But what about putting back the date of payment of corporation tax? That could be worthwhile.

 

[Jaydee]

But what about putting back the date of payment of corporation tax? That could be worthwhile.

Absolutely - we have done it many times for such reasons - my point was that it is not worth it to save accountancy fees.