Commentary

B8.110 What is the accounting date?

Business tax
Business tax | Commentary

B8.110 What is the accounting date?

Business tax | Commentary

B8.110 What is the accounting date?

The 'accounting date' in relation to a tax year is the date in the tax year to which the accounts are drawn up1. Where two or more periods of account end in the same tax year, the accounting date is the latest of these dates2.

This rule is flexed slightly if there is a slight variation in the accounting date because the accounts are drawn up to a particular day in the year rather than a particular date — for example always the last Saturday in April as discussed below:

Accounts drawn to a particular day (not date)

Some traders may choose to make up their accounts to a particular day in the year, rather than a particular date, for example to the last Saturday in April. The chosen day can then fall on a range of (normally) seven dates. Although such accounts are not strictly for 12 month periods they are treated as such provided the trader adopts the basis consistently. This avoids the triggering of the change of accounting date rules every year3.

For this approach to apply it is necessary that4:

  1.  

    •     the trader has drawn up accounts to a particular day

  2.  

    •     that day can fall on one of only seven consecutive days (or if that day is in February, one of only eight consecutive days to take account of leap years), and

  3.  

    •     the trader elects for the fourth day of those possible seven (or eight in February) days to be

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