Companies Act 1985

A company’s financial year and accounting reference periods E+W+S

223 A company’s financial year. E+W+S

(1) A company’s “financial year” is determined as follows.

(2) Its first financial year begins with the first day of its first accounting reference period and ends with the last day of that period or such other date, not more than seven days before or after the end of that period, as the directors may determine.

(3) Subsequent financial years begin with the day immediately following the end of the company’s previous financial year and end with the last day of its next accounting reference period or such other date, not more than seven days before or after the end of that period, as the directors may determine.

(4) In relation to an undertaking which is not a company, references in this Act to its financial year are to any period in respect of which a profit and loss account of the undertaking is required to be made up (by its constitution or by the law under which it is established), whether that period is a year or not.

(5) The directors of a parent company shall secure that, except where in their opinion there are good reasons against it, the financial year of each of its subsidiary undertakings coincides with the company’s own financial year.

Modifications etc. (not altering text)

C1 S. 223 applied (E.W.) (prosp.) by Charities Act 1992 (c. 41), ss. 1(1), 79(2).

S. 223 applied (E.W.)(temporarily) (1.8.1993) by 1993 c. 10, s. 99(1)(3)(4), Sch. 8 Pt.II

C2 S. 223(4) applied (with modifications) (6.3.1997) by S.I. 1997/648, reg. 3(2), Sch. 1 para. 4(1)(a)(ii)

[F1 224 Accounting reference periods and accounting reference date. E+W+S

(1) A company’s accounting reference periods are determined according to its accounting reference date.

(2) A company [F2 incorporated before 1st April 1996] may, at any time before the end of the period of nine months beginning with the date of its incorporation, by notice in the prescribed form given to the registrar specify its accounting reference date, that is, the date on which its accounting reference period ends in each calendar year.

(3) Failing such notice, [F3 the accounting reference date of such a company] is—

(a) in the case of a company incorporated before [F4 1st April 1990], 31st March;

(b) in the case of a company incorporated after [F5 1st April 1990], the last day of the month in which the anniversary of its incorporation falls.

[F6 (3A) The accounting reference date of a company incorporated on or after 1st April 1996 is the last day of the month in which the anniversary of its incorporation falls.]

(4) A company’s first accounting reference period is the period of more than six months, but not more than 18 months, beginning with the date of its incorporation and ending with its accounting reference date.

(5) Its subsequent accounting reference periods are successiveperiods of twelve months beginning immediately after the end of the previous accounting reference period and ending with its accounting reference date.

(6) This section has effect subject to the provisions of section 225 relating to the alteration of accounting reference dates and the consequences of such alteration.]

Textual Amendments

F1 New ss. 223–225 inserted (subject to the saving and transitional provisions in S.I. 1990/355, arts. 6–9, Sch. 2, by Companies Act 1989 (c. 40, SIF 27), ss. 1, 3, 213(2) as part of the text inserted in place of ss. 221–262 (as mentioned in s. 1(a) of the 1989 Act)

F2 Words in s. 224(2) inserted (1.4.1996) by S.I. 1996/189, reg. 2(2)

F3 Words in s. 224(3) substituted (1.4.1996) by S.I. 1996/189, reg. 2(3)

F4 Words substituted by S.I. 1990/355, art. 15(a)

F5 Words substituted by S.I. 1990/355, art. 15(b)

F6 S. 224(3A) inserted (1.4.1996) by S.I. 1996/189, reg. 2(4)

Modifications etc. (not altering text)

C3 S. 224(4) modified by Trustee Savings Bank Act 1985 (c. 58, SIF 110), s. 3, Sch. 1 para. 6(3)

S. 224(4) modified (27. 12. 1991) by S.I. 1991/2908, art. 2, Sch. para. 4(2)

[F7 225 Alteration of accounting reference date. E+W+S

(1) A company may by notice in the prescribed form given to the registrar specify a new accounting reference date [F8 having effect in relation to -

(a) the company’s current accounting reference period and subsequent periods; or

(b) the company’s previous accounting reference period and subsequent periods.

A company’s “previous accounting reference period” means that immediately preceding its current accounting reference period.]

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The notice shall state whether the current or previous accounting reference period—

(a) is to be shortened, so as to come to an end on the first occasion on which the new accounting reference date falls or fell after the beginning of the period, or

(b) is to be extended, so as to come to an end on the second occasion on which that date falls or fell after the beginning of the period.

(4) A notice under subsection (1) stating that the current [F9 or previous] accounting reference period is to be extended is ineffective, except as mentioned below, if given less than five years after the end of an earlier accounting reference period of the company which was extended by virtue of this section.

This subsection does not apply—

(a)

[F10 to a notice given by a company which is a subsidiary undertaking or parent undertaking of another EEA undertaking if the new accounting reference date coincides with that of the other EEA undertaking or, where that undertaking is not a company, with the last day of its financial year, or]

(b)

where [F11 the company is in administration] under Part II of the Insolvency Act 1986,

or where the Secretary of State directs that it should not apply, which he may do with respect to a notice which has been given or which may be given.

(5) A notice under [F12 subsection (1)]may not be given [F13 in respect of a previous accounting reference period]if the period allowed for laying and delivering accounts and reports in relation to [F14 that period] has already expired.

(6) [F15 A company’s accounting reference period may not in any case, unless the company is in administration] under Part II of the Insolvency Act 1986, be extended so as to exceed 18 months and a notice under this section is ineffective if the current or previous accounting reference period as extended in accordance with the notice would exceed that limit.]

[F16 (7) In this section “EEA undertaking” means an undertaking established under the law of any part of the United Kingdom or the law of any other EEA State.]

Textual Amendments

F7 New ss. 223–225 inserted (subject to the saving and transitional provisions in S.I. 1990/355, arts. 6–9, Sch. 2, by Companies Act 1989 (c. 40, SIF 27), ss. 1, 3, 213(2) as part of the text inserted in place of ss. 221–262 (as mentioned in s. 1(a) of the 1989 Act)

F8 S. 225(1)(a)(b) and words preceding and subsequent to them substituted (1.4.1996) for words in s. 225(1) by S.I. 1996/189, reg. 3(2)

F9 Words in s. 225(3) inserted (1.4.1996) by S.I. 1996/189, reg. 3(4)(a)

F10 S. 225(4)(a) substituted (1.4.1996) by S.I. 1996/189, reg. 3(4)(b)

F11 Words in s. 225(4) substituted (15.9.2003) by Enterprise Act 2002 (c. 40), ss. 248, 279, Sch. 17 para. 4(a) (with s. 249(1)-(3)); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to transitional provisions in arts. 3-8 (as amended by S.I. 2003/2332, S.I. 2003/3340))

F12 Words in s. 225(5) substituted (1.4.1996) by S.I. 1996/189, reg. 3(5)(a)

F13 Words in s. 225(5) inserted (1.4.1996) by S.I. 1996/189, reg. 3(5)(b)

F14 Words in s. 225(5) substituted (1.4.1996) by 1996/189, reg. 3(5)(c)

F15 Words in s. 225(6) substituted (15.9.2003) by Enterprise Act 2002 (c. 40), ss. 248, 279, Sch. 17 para. 4(b) (with s. 249(1)-(3)); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to transitional provisions in arts. 3-8 (as amended by S.I. 2003/2332, S.I. 2003/3340))

F16 S. 225(7) inserted (1.4.1996) by 1996/189, reg. 3(6)