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Financial year-end: Everything you need to know
Ensuring a smooth and stress-free year-end close is the goal of every finance leader. Solid preparation is key, but so is having the right tools, accurate data and a clear plan of action.
This guide walks you through essential steps, challenges, and tips for successfully navigating the financial year-end. It helps your finance team streamline operations, reduce errors, and prepare for the new fiscal year with confidence.
What is the financial year-end and why does it matter?
The financial year-end marks the conclusion of a company’s accounting period, where all financial records are closed off for reporting and tax purposes. For some, the financial year coincides with the fiscal year. For others, there are two ‘year-ends’ to deal with if the accounting year-end is at another point such as the end of the calendar year.
Either way, closing off the year from a taxation and accounting basis (or both) requires plenty of effort.
The importance of financial year-end lies in ensuring accurate financial reporting, preparing for audits, and meeting legal obligations, such as tax filings. Efficient preparation can streamline closing accounts, improve budgeting, and set the stage for strategic business planning in the new year.
It’s always good to get new ideas on how best to approach important tasks such as closing accounts.
Key dates in the UK financial year
In the UK, the financial year typically runs from 6th April to 5th April of the following year. Important key dates include:
- 6th April: Start of the new financial year.
- 31st January: Deadline for submitting self-assessment tax returns for the previous financial year.
- 5th April: End of the financial year.
- 19th May: Deadline for submitting final PAYE returns for employers.
These dates are crucial for tax reporting, filing returns, and planning business finances effectively.
Why does the UK financial year start in April?
The UK financial year starts in April due to historical factors dating back to the 18th century. The calendar change from the Julian to the Gregorian system in 1752 shifted the new tax year from March 25th (the old New Year) to April 5th, and later to April 6th.
This was done to maintain the same number of days for tax collection after adjusting for the calendar reform. The April start has since remained, forming the foundation for tax assessments, business accounting, and government financial planning.
How do companies choose their fiscal year-end?
Companies choose their fiscal year-end based on several key factors, including:
- Industry cycles: Aligning the fiscal year-end with slower business periods or natural business downtime.
- Seasonality: Choosing a period when operations are less busy, simplifying the process of closing accounts.
- Tax considerations: Ensuring tax reporting is efficient and aligns with government deadlines.
- Parent company schedules: Aligning with the fiscal year-end of parent companies for easier consolidation.
- Regulatory requirements: Meeting legal or industry-specific financial reporting obligations.
It is vital that you know when your fiscal year ends so you can give yourself enough time to prepare.
Changing your financial year - Can you move it?
Yes, it is possible to change your financial year-end. Changing your financial year can be a strategic decision for a business, allowing for better alignment with operational cycles, industry standards, or tax considerations.
However, it involves careful planning and adherence to legal requirements. In the UK, businesses must notify HM Revenue and Customs (HMRC) of any changes to their financial year-end.
For detailed guidance, you can refer to the official HMRC resource on changing your accounting period: HMRC - Change your accounting period
How to prepare for year-end reporting: Your action plan for year-end
With so much to do to get through year-end, it makes sense to prepare your Finance team in advance and have a clear plan in place on how to tackle all the various tasks needed.
All Finance teams need to be cognisant of the pace of change. Businesses are increasingly looking to respond to ever changing market conditions and how they can compete and be successful in the markets that they play in. Our role in finance is to help support that. — The Access Group Chief Financial Officer, Rob Binns
Tips & Best Practices for End of Financial Year
In this quick 5-minute video, Phil Walters, previous Customer Success Manager at The Access Group, offers some useful tips when preparing for financial month-end and year-end.
- Plan Early: Establish a clear timeline and allocate responsibilities well in advance.
- Organise Data: Ensure that all financial records are up-to-date and accessible.
- Review Processes: Regularly assess internal processes for efficiency.
- Communicate: Maintain open lines of communication to address any concerns promptly.
- Stay Compliant: Be aware of any regulatory changes that may impact reporting.
Your 10-step year-end accounts checklist
For practical tips on how to avoid penalties and enjoy a seamless end to the financial year, we have put together a quick and easy-to-use 10-step checklist.
As we prepare and manage year-end close, we also need to find the balance of getting a budget in place for the new fiscal year. Budgeting with uncertainty is challenging, so finance leaders will need to assess current economic instability and ensure the budget is set up to be flexible to adjustments as the year progresses. — The Access Group Chief Financial Officer, Rob Binns
Looking forwards: Your month end checklist
You can make life at year-end so much easier by putting best practice in place every month. Download our month-end checklist and give your team a head start.
Finance leaders should be thinking about how we support the business growth we know we want to strive for in the upcoming year. How do I make what we do as efficient and as effective as possible? If you ask the average CEO, that’s what they want from their Finance team. — The Access Group Chief Financial Officer, Rob Binns
Common Financial Year-End Challenges
Navigating the financial year-end presents a range of challenges for businesses demanding careful attention and strategic planning. Here are some common challenges businesses we’ve worked with face. By addressing these challenges proactively, companies can navigate the financial year-end with greater ease.
Prepare for the year ahead with our go-to year-end accounts checklist.
Time Challenges
The financial year-end can be an incredibly busy period for companies, often leading to tight deadlines and increased workloads for finance teams. This rush can result in stress and oversight, complicating the closing process.
Data Accuracy
Ensuring data accuracy is crucial for producing reliable financial statements. Errors in data entry can have significant repercussions, potentially impacting decision-making and compliance.
Human Error
Human mistakes can occur in any part of the financial reporting process, from data entry to interpretation of financial information. These errors may lead to compliance issues and inaccurate reporting.
Tax Compliance
Managing tax obligations can be daunting during year-end. Companies must stay updated on changing regulations to ensure they meet their tax responsibilities, avoiding penalties and fines.
Regulatory Changes
Keeping up with regulatory changes can be challenging, requiring businesses to adapt their processes swiftly. This often involves additional training and adjustments to financial systems.
Managing Expenses
Accurate expense tracking is vital for financial clarity, yet it can be overlooked amid the hustle of year-end preparations. Implementing effective tracking methods can help maintain a clear view of financial health.
Solving your financial year-end challenges with Access
Navigating financial year-end challenges can be daunting, but with Access Group's finance management software, you can streamline the process and enhance accuracy.
Our solutions are designed to integrate seamlessly into your operations, helping you manage data effectively and comply with regulatory requirements.
By automating time-consuming tasks, you can focus on strategic decision-making and improving your overall financial performance.
Financial year-end FAQs
What’s the deadline for financial reporting?
Most UK limited companies must file their annual accounts with Companies House within nine months of their financial year-end (for example, if your year-end is 31 December 2024, your deadline is 30 September 2025).
However, public limited companies (PLCs) have six months, and new companies have slightly different rules for their first accounts. Always check your filing dates on the Companies House website, as late submissions can lead to automatic penalties
What other business reporting duties do I have?
In addition to filing annual accounts, businesses must submit a Corporation Tax return (CT600) to HMRC, a confirmation statement to Companies House, and, if registered regular VAT returns. Employers also need to submit PAYE and pension reports.
Larger organisations may have additional requirements such as gender pay gap or sustainability disclosures. Keeping a compliance calendar helps ensure no filings are missed.
What are the Q1, Q2, Q3, Q4 of the financial year in the UK?
For organisations that follow the standard UK financial year (April to March), Q1 runs from April to June, Q2 from July to September, Q3 from October to December, and Q4 from January to March.
If your business uses a different accounting year-end, your quarters will align differently, so always base internal reports on your company’s specific financial calendar.
When will the financial year 2025 end?
If you follow the standard UK financial year, it ends on 31 March 2025. However, some businesses use an accounting period that matches the tax year (6 April 2024 to 5 April 2025) or a different 12-month cycle that suits their operations. Check your company registration documents or accounting software settings to confirm your exact year-end date.
What happens if I miss the filing deadline?
Missing your accounts or tax filing deadlines can trigger late-filing penalties from Companies House or HMRC, which increase the longer the delay continues. Persistent non-compliance may even lead to prosecution of directors or company dissolution. Setting automated reminders and using accounting software helps reduce the risk of missing critical dates.
What software can help manage the year-end process?
Modern finance platform as Access Financials integrate accounting, reporting, and compliance features in one system. They automate reconciliations, generate statutory reports, and provide dashboards that give finance teams full control during year-end. Using the right software not only saves time but also reduces the risk of human error.
