Fiscal/ financial year of a company

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A friend told me today that their company's financial year starts and end in October. He reassured me this is actually quite common (is it?), I am not quite convinced.

There are obvious reasons why most would choose April to be the month to end the financial year as many new tax changes introduced by the government starts from the government's own start of the fiscal year, which is at the beginning of April. Otherwise, companies may need to incorporate new tax changes half way through the financial year. There too are obvious reasons why the end of December would be a bad choice (unless your accounting staffs enjoy the thrill of having big Christmas deadlines every year!).


However, after doing some quick searches online, the exact date doesn't seem to matter a great deal (at least in the UK), it seems to depend on when the company was formed. There are some considerations as to when the corporation tax is due and the company's cash flow through out the year, and also convenience for aligning with the government's tax year from April to end of March. Other than that, it doesn't seem to make much difference, although most companies will still typically choose the end of month at the end of a quarter.

http://www.ukbusinessforums.co.uk/threads/financial-year-start-date-new-company.135571/



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