UK Company Year End for US Owners: Keep 31 March or Move to December?

UK company year end: an introduction

Your UK company year end can be almost any date for Companies House, but a US owner with control may have no such freedom for US tax. The US generally requires a controlled company to use the tax year of its majority US shareholder, usually the calendar year. So a company with a 31 March date may need two sets of year-end figures. Aligning the dates is one fix, though it has costs of its own.

This article supports our guide for US and UK founders and executives. For the form itself, read our article on Form 5471 for a UK company. Here, we deal with one practical decision: keep your date or change it.

What a UK company year end actually is

The formal term is the accounting reference date. It is the day your company's financial year ends, and it drives your filing deadlines. A new company gets one automatically, and many owners never question it. However, the date is a choice, and GOV.UK sets out how to change it.

Why this matters more after 2025

The US rule is not new. What changed is one escape from it. For tax years beginning after 30 November 2025, a company can no longer use a year starting one month before its majority shareholder's year. As a result, a 30 November year end no longer works as a US year for these companies. Owners who relied on that date should review it now.

Does the US rule apply to your company?

It applies to a specified foreign corporation. In short, that means a controlled foreign corporation in which a US shareholder holds more than 50%. A British owner or a US minority holder is usually not affected.

The specified foreign corporation test

Section 898 covers a foreign corporation treated as a controlled foreign corporation that meets an ownership test. A controlled foreign corporation, or CFC, is a foreign company more than 50% owned by US shareholders with at least 10% each. The statute also attributes some holdings between related persons, so count family and connected shareholdings carefully.

What the required year means

The required year is that of the majority US shareholder. For an individual American, this is almost always the calendar year. The Form 5471 instructions say the annual accounting period of such a company is generally required to be that shareholder's tax year. Where there is more than one majority shareholder, the year producing the least aggregate deferral applies.

Cases that fall outside it

A company with no US majority holder generally keeps its own period for US purposes. Two unrelated Americans holding 50% each may also need a closer look, because the statute's more-than-50% test may not be met. Form 5471 can still be required for such companies. Therefore, being outside this rule does not mean you are outside US reporting.

What does a mismatched date actually cost?

The main cost is an extra set of figures every year. UK deadlines run from the accounts date, while US figures may need cutting at 31 December. Each cut adds bookkeeping, along with some questions about tax.

Two cut-off dates

Take a company with a 31 March date and a calendar US year. Its US year spans the last three months of one UK period and the first nine of the next. So you need reliable management accounts to 31 December, as well as your statutory accounts to 31 March. In addition, your US earnings and profits calculation differs from the UK accounts anyway. A mismatch adds to that.

UK tax that straddles the US year

UK Corporation Tax is due 9 months and 1 day after the period ends for most companies. Meanwhile, the US calculations need tax figures for a different 12 months. You therefore apportion UK tax from two periods, and one may not be final when the US return is prepared. That can mean revising a US figure later.

Penalties for a wrong Form 5471

Form 5471 has a $10,000 penalty for each annual accounting period of each foreign corporation where a failure applies. Further amounts can follow after IRS notice, and foreign tax credits can be reduced. So filing on the wrong period is not a minor detail. If you have been filing on a March basis, we recommend reviewing past forms with this rule in mind.

What are the rules for changing a UK company year end?

You can shorten a financial year as often as needed at present, but lengthening is limited. Timing is tied to your current filing deadline, so a change needs planning rather than a late rush.

Shortening and lengthening

GOV.UK says you can change the current financial year or the one immediately before it. You can shorten by at least one day. Lengthening is limited to a maximum of 18 months and generally once in five years, as section 392 of the Companies Act 2006 provides. You cannot change the date when accounts are overdue. The application goes online or on form AA01.

A change coming in 2028

Companies House has announced accounts reforms from April 2028. Its guidance on accounts says you will need to give a business reason to shorten more than once in five years. That guidance also sets out the deadline after shortening. It is the longer of 9 months from the new date, or 3 months from receipt of the notice.

Tell HMRC too

A change at Companies House does not update HMRC automatically. GOV.UK says that if you shorten or lengthen the financial year, you must also update your accounting period dates with HMRC. A period for Corporation Tax cannot run beyond 12 months, so a lengthened set of accounts can produce two tax periods and two returns. Ask your preparer to check the split.

What does moving from March to December look like?

In the example below, a company shortens one period to nine months. The dates are simple, but the short period also shrinks the UK profit limits.

A worked example

Consider a typical case. Hannah, a fictional American living in Leeds, owns all the shares in a UK trading company with a 31 March date. She wants the UK company year end to match her calendar US year. Extending the year ended 31 March 2026 to December would create a 21-month period, which exceeds the 18-month limit. So she shortens the current period, which started on 1 April 2026, to end on 31 December 2026.

Using the standard GOV.UK deadlines, the accounts for that nine-month period are due by 30 September 2027, assuming she gives notice early. Corporation Tax is due by 1 October 2027. The Company Tax Return is due 12 months after the period ends, on 31 December 2027. From then on, each UK period matches the US year.

The effect on Corporation Tax

The GOV.UK rates page gives a 19% rate on profits of £50,000 or less, 25% above £250,000, and marginal relief between. These limits reduce proportionately for a short period. For Hannah's 275-day period, the £50,000 limit becomes about £37,671, and the £250,000 limit about £188,356. So if nine months of profit is £45,000, part of it now sits in the marginal relief band.

The effect on Hannah's US return

For US purposes, the calendar 2026 year still includes three months from the old period, 1 January to 31 March 2026. That stub still needs figures and an apportionment of UK tax. After 2026, though, there is one set of accounts, one set of tax numbers and much less reconciliation. Her later returns under the net CFC tested income rules become simpler to prepare.

Should you keep the date or change it?

Alignment usually suits a company with one American majority owner who expects to stay that way. Keeping the old date may suit a company with sector or lender reasons for it. We use four questions to frame this, and the commercial decision is yours.

Who owns the company, and will that change?

A sale of shares or a funding round can move the company in or out of the rule. A transfer to a non-US holder might end it. If that is likely soon, a date change may not earn back its cost.

Does your trade need the date?

Seasonal businesses often prefer a year end in their quiet period, because stock and staff are easier to count. Lenders and investors may also expect a certain date. Weigh these against the extra US work.

How good are your monthly accounts?

Clean monthly closes make a mismatched date tolerable. Without them, a December cut-off becomes an expensive reconstruction each year. Ask how long your bookkeeper would need to produce a reliable balance sheet at 31 December.

Can you absorb a short period?

Compare the marginal relief effect with the yearly saving on reconciliation. Also look at dividend timing, since a UK company year end change does not itself alter when you are taxed on dividends. We can model both dates on your figures.

What about companies with a 30 November date?

These companies need attention first. Many chose that UK company year end because it fitted the one-month deferral. That option has ended for tax years beginning after 30 November 2025.

The transition rule

Public Law 119-21 includes a transition rule at section 70352(c). It ends the company's first affected tax year at the same time as its first required year ending after that date. The change is treated as initiated by the company, with the Secretary's consent. In practice, a November company owned by a calendar-year American has a short US period to report.

Whether to move the accounts as well

The US change does not force a change in the UK accounts. However, keeping a November UK company year end now creates a one-month mismatch every year. That mismatch is small, but it still means a December cut-off. Moving the UK date by a single month may therefore be simple, so compare it with the alternatives.

What about a brand new company?

A new company has the easiest decision of all. You can settle the date before any accounts exist, and you avoid a stub period later. Raise the point at formation, not after the first year.

The first accounts

GOV.UK says the first accounts of a private company are due 21 months after registration. Later accounts are due 9 months after the financial year ends. Consequently, choosing the UK company year end early gives you a clean run of dates. Note that a first period longer than 12 months can create more than one Corporation Tax period.

Ownership on day one

Record who holds the shares on the first day, including any nominee holdings. The statute uses testing days, so the position is measured at set points rather than only at the year end. An American co-founder and a British co-founder with equal shares may have a different answer from a sole American owner. Write this down, because it decides which year applies.

A short calendar for your file

For any date, note four items in one place. These are the accounts deadline, the tax payment date, the tax return date and the US return date. Our article for a US founder selling a UK company shows why tidy records matter later. Review your UK company year end again whenever ownership changes.

How US UK Tax Experts can help

US UK Tax Experts prepares US and UK returns from one file, so the two agree. For a UK company year end question, we work out whether the rule applies, compare both dates and prepare the resulting forms. See our US federal returns service and our business and corporate tax page. We can also review earlier Forms 5471 for the period used.

Conclusion

A UK date set for convenience can quietly create a yearly US reconciliation. If an American controls your company, check the required year first, then count what the mismatch costs. Moving to December usually means one short period and simpler years after. Either way, make the decision deliberately, with each filing date on the calendar.

Contact us

To review your date, email hello@usuktaxexperts.com or use our contact page. Tell us your year end, who owns the shares and which period your Forms 5471 use. We reply within one working day.