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first month of financial year

Hello,

 

if the company is new, incorporated half way during the tax year, what would one select as "first month of financial year" under "accounts and settings" -> "advanced" -> "accounting"?

 

I understand that the usual tax year is April 6 to April 5, but as an example, if the company say was incorporated in October last year, what would the first month of the financial year be? April or October? I'm asking because the first accounts would cover October to October, right?

Solved
Best answer 07-26-2018

Accepted Solutions
Anonymous
Not applicable

Re: first month of financial year

Hey confused_ltd,

 

Welcome to Community.

 

The answer to your query depends on how you wish to show your reports going forwards.

 

If you chose to run your financial year based on when the company was incorporated, then you are correct in that you would chose October as the first month of the financial year.

 

However, if you are wanting to follow the tax year going forwards so that things like VAT reporting falls in line with the financial year, then you would chose April as the first month. Doing this would mean that your first lot of reports for the Financial Year would be October to April and is an accurate reflection of what has happened in life.

 

The choice is yours, however you may wish to check with your accountant and possibly HMRC as to how they wish you to do your reporting.

 

Let me know if you have any further queries.

1 REPLY 1
Anonymous
Not applicable

Re: first month of financial year

Hey confused_ltd,

 

Welcome to Community.

 

The answer to your query depends on how you wish to show your reports going forwards.

 

If you chose to run your financial year based on when the company was incorporated, then you are correct in that you would chose October as the first month of the financial year.

 

However, if you are wanting to follow the tax year going forwards so that things like VAT reporting falls in line with the financial year, then you would chose April as the first month. Doing this would mean that your first lot of reports for the Financial Year would be October to April and is an accurate reflection of what has happened in life.

 

The choice is yours, however you may wish to check with your accountant and possibly HMRC as to how they wish you to do your reporting.

 

Let me know if you have any further queries.