Some charities may wish to change their year end date, most commonly lengthening the accounting period to obtain additional filing time. Alternatively, some charities may wish to consider shortening their year end if they are concerned about not being able to complete their usual year end due to restrictions on access to their offices or accounting records.
Rules for lengthening and shortening accounting periods vary depending on whether your charity is registered as a charitable company or not and whether you are newly registered.
Your year end cannot be changed if your accounts are overdue for filing with either Companies House or the Charity Commission.
Rules and restrictions
Charitable companies can shorten their accounting period as many times as they like - the minimum period you can shorten it by is one day.
Charitable companies can also lengthen their accounting period to a maximum length of 18 months. However, extensions can only be made once every five years, so this option is not available if you have previously lengthened your accounting period within the last five years, unless the lengthening was or is to align with a group reporting date.
Notifying Companies House
You can notify Companies House of a change in a charitable company’s year-end date using the online Companies House service, which is used for updating directors’ and officers’ details. Take care to select the correct option for your revised year end, as it can be easy to accidentally extend when you mean to shorten the accounting period or vice versa.
Changing your year end date will also change your deadline for filing your accounts.
Impact on corporation tax filings
For trading and other subsidiary companies, and charitable companies where a tax return has been requested, the reference period for corporation tax purposes will change to match the accounting period. If you lengthen your accounting period you will need to file two tax returns, as an accounting period for tax purposes cannot be longer than 12 months.
If you shorten your accounting period and normally submit a tax return through HMRC’s online service, you or your tax agent, will need to contact HMRC to update your accounting period before a return is filed.Additionally, if you shorten your accounting period and normally use accounting software to file your Company Tax Return, enter the new dates for your accounting period before you file your return.
Non-company charities, including charitable incorporated organisations (CIOs)
Rules and restrictions
Unincorporated charities and CIOs can change their accounting periods to run for more or less than 12 months.
An accounting period needs to be a minimum of six months, and no longer than 18 months. Changes can only be made for the current financial year and it is only possible to make a change once every three years.
Changing your financial year or period will also change your deadline for filing the annual return and accounts.
Notifying the Charity Commission
To change your accounting period end date, you will need to use the Charity Commission online services, logging in with your charity registration number and password, as you would to file your annual return here.
Changing your year end date will also change your deadline for filing your accounts and annual return.
Newly registered charities
Newly registered charities who have not yet submitted an annual return, will need to seek permission to change their year end date, using the Charity Commission online enquiry form, found here.
This article was last updated on 30 March 2020.
If you would like advice on how your charity or not-for-profit can change your year end or would like to discuss how we can help you manage the impact of Covid-19, please contact your usual Buzzacott contact or fill out the form below to speak to a member of our expert Charity team.
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