Can I Change My Company Year End? How the AA01 Works

The rules on changing your company year end

Your year end, properly called the accounting reference date, changes when you file form AA01 with Companies House, either online or on paper. GOV.UK limits this to the current financial year or the one immediately before it.

The rules are not symmetrical:

• Shortening. As often as you like, down to a single day. That is today’s position, and a limit is coming. See below.
• Extending. Up to 18 months. Longer only where the company is in administration. Normally once every five years.
• Extending more often. Three routes only: the company is in administration, you are aligning with a parent or subsidiary, or Companies House has given special permission.
• Overdue accounts. The door closes. A period whose accounts are late cannot be changed.

Two details trip people up more than the headline rules. An extension you already hold on your accounts deadline disappears the moment the year end changes, which GOV.UK states plainly. And if the new deadline has already gone by when you make the change, a late filing penalty follows immediately.

There is one real prize in shortening, and it sits in company law rather than tax. Section 442(4) of the Companies Act 2006 says that where a notice shortens the period, you get whichever expires last: the normal deadline, or three months from the date of that notice. File the shortening close to your original deadline and you buy filing time at Companies House. HMRC gives you nothing extra.

How changing your year end moves your Corporation Tax payment date

For companies with taxable profits up to £1.5 million, GOV.UK puts the payment date at nine months and one day after the accounting period ends. The date is tied to the period end. Move one and you move the other.

Our guide to Corporation Tax payment and filing deadlines covers the full timetable if you need to locate your current dates.

Shortening brings the tax forward. Say the year end is 31 March 2026. Payment falls due on 1 January 2027. Shorten that year to 31 December 2025 and the money is due on 1 October 2026 instead. Same profits, three months earlier.

Extending leaves the first payment exactly where it was. This is where the plan usually collapses. Corporation Tax periods cannot exceed 12 months, so lengthening the period of account does not produce one long tax period. It produces two.

A company moves its 31 December 2026 year end out to 30 June 2027. The first accounting period still closes on 31 December 2026, so the tax on it is still due on 1 October 2027. Nothing changed. The six months to 30 June 2027 then becomes a period in its own right, with tax due on 1 April 2028. What moved was the accounts deadline, not the tax bill the director was worried about.

Why extending creates two Company Tax Returns

The confusion comes from two terms that sound interchangeable and are not.

Where accounts run beyond 12 months, GOV.UK requires two returns, because no accounting period can be longer than that. Profits are apportioned across the two.

HMRC will not do this for you. The guidance is specific: having lengthened the financial year, you must contact HMRC to update your accounting period dates before the original filing date of your Company Tax Return. Miss that and a late filing penalty becomes possible. HMRC works through a year end moved from 31 December 2024 to 31 March 2025, where the dates need updating before 31 December 2025 and every return filed by 31 March 2026.

Filing through software rather than HMRC’s online service? Enter the new accounting period dates first. Two returns also means two computations, which matters if we prepare your Corporation Tax return.

The short period trap: pro-rated instalment thresholds

Shorten the year and a profitable company can land in quarterly instalments without anyone expecting it.

HMRC’s Company Taxation Manual confirms the point. The £1.5 million upper limit for instalments reduces proportionately where the accounting period runs under 12 months, so six months carries a limit of £750,000. Associated companies cut it further, since the limit is divided between them.

If profits sit anywhere near that line, check it before shortening. The rule belongs to the instalment limits. Do not assume every other company, audit or lender threshold behaves the same way.

Worked example: shortening by one day to protect a filing deadline

This is the change that reliably works, and it works because of the filing rule rather than anything to do with tax.

A company has a 31 December 2025 year end, so its accounts are due at Companies House by 30 September 2026. Mid September arrives, the accounts are not finished, and a penalty is days away.

On 25 September 2026 the company files an AA01 shortening the accounting reference date to 30 December 2025. Section 442(4) then gives the later of two dates: the normal deadline of 30 September 2026, or three months from the notice, which is 25 December 2026. The later one wins. Close to three months gained, no penalty.

Three things decide whether it is worth doing:

• The tax does not move. Corporation Tax on the period to 30 December 2025 is still due on 1 October 2026. Filing time and payment time are different things.
• Timing is everything. The notice has to reach Companies House before the original deadline passes, because an overdue period cannot be changed.
• The date sticks. Your accounting reference date is 30 December from now on, not 31 December, unless you change it again.

Worked example: extending the year end to defer tax, and why it does not work

A company with a 31 July 2026 year end has had a strong year. The director wants the tax pushed back, so the year is extended by six months to 31 January 2027. That gives an 18-month period of account running from 1 August 2025.

What comes out of it is not a deferral. It is two payments and two returns:

That first date, 1 May 2027, is precisely where it would have been had nobody touched anything. In exchange for deferring nothing, the company has picked up:

• A second Company Tax Return, with profits apportioned between the periods.
• A duty to update its accounting period dates with HMRC before the original filing date, on pain of a late filing penalty.
• One used extension. The once-in-five-years allowance is now gone, and unavailable for a change that might have mattered more.

Extending moves the accounts deadline. It cannot move tax on the first 12 months, because a Corporation Tax accounting period does not run longer than 12 months.

What Tax Care Accountants checks before filing an AA01

The form takes minutes to file and is difficult to unwind, so we run the same checks every time. They sit alongside the usual year end accounts preparation rather than replacing any of it.

1. Is the change still available? Accounts already overdue for that period mean the answer is no, and Companies House will reject the form.
2. Is an existing extension about to vanish? Any extension already granted on the accounts deadline goes when the year end changes.
3. Where does the Corporation Tax payment date land? We recalculate it and test it against your cash-flow forecast. The old date is no longer the relevant one.
4. One return or two? Anything over 12 months means two returns, two computations and two payment dates.
5. Do instalment thresholds come into play? They reduce proportionately for periods under 12 months.
6. Who updates HMRC, and by when? Filing the AA01 does not do it. We agree who makes that update before anyone files anything.
7. What have you promised your lender? Covenant tests and reporting dates are usually pinned to the old year end.
8. Is an extension actually needed? We check whether the once-in-five-years allowance has been used, and whether a shortening would get you there instead.

What changes in April 2028

Companies House confirmed on 23 October 2026 that a limit on how many times a company can shorten its accounting reference period is among the filing changes going ahead in April 2028. Mandatory software filing of accounts in iXBRL format arrives on the same date.

Shortening repeatedly has been a standard way of buying filing time for years. That option is about to narrow, so anyone leaning on it needs another plan. We cover the wider package in our note on the Companies House accounts filing changes.

Conclusion

Changing your year end is a deadline decision far more often than a tax one. Shortening pulls your Corporation Tax payment forward while potentially buying you time at Companies House. Extending past 12 months splits the tax into two returns and leaves the first payment date untouched. Work out where both dates land before the AA01 goes in, not afterwards.

Check the dates before you file the AA01. Send us your current year end and the date you are considering. We will tell you where your Companies House deadline and your Corporation Tax payment date would fall, and whether the change achieves what you want. If it does not, we will say so.

Talk to our limited company accounts team or call now +44 (0)1213681277.