Me again!

Right, it is our first year of trading as an LLP and have our accounts due in July 09. Can we select our own accounts period (eg 19th Sept 07- 18th Sept 08)? Does it have to be a certain length of time?
I am guessing ideally we would set it from 19th Sept 07-5th April 09 but that would make it 19 months which if I am correct is too long?

I need to put a date into the partnership tax return soon so need some info on this. Sorry if I appear to be a bit thick. :redface:

If we got an accountant to look at this, what period would they recommend?
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You have some choice in setting your accounting date, but you are governed by Companies House. The LLP will have been allocated an "accounting reference date" when it was set up - the anniversary of the month of formation.

That means that they will be expecting accounts for the period from 19 September 2007 to 30 September 2008.

You can change this to something more suitable, but the period cannot be longer than 18 months, and in any event the accounts must be filed with them by 19 July 2009 - 22 months from incorporation. Future accounts made up to 30 September each year must be filed by 30 July the following year - not 31 July as you might expect.

In general for partnerships I advise to make accounts to 31 March, but as you've noticed you cannot have an accounting period longer than 18 months. 31 March is basically the same as 5 April for income tax purposes.

The reason that I suggest this is that it's much easier to understand how the accounts profits link to the profits in the tax return, and that you actually pay tax on. There is a mechanism to get round this if you use September as the year end, but if the profits grow there can be a nasty surprise when you cease trading. It's not cast in stone, and needs to be discussed in relation to seasonal trade variations, stock levels etc, and you can make a case for 30 April, which delays payment of tax on increasing profits.

If you would like 31 March, then there would be two ways to achieve this. If you didn't start trade immediately on 19 September, shorten the first accounts period, so that it runs for 11 days to 30 September 2007, or some other date near to commencement. You can then extend the second period to match 31 March. Be aware that you will still need to have some figures to go on the 2008 self assessment return.

As I said, it's a simple topic, but with a few variations and you are best off discussing it with your accountant.
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Good advice David, exactly as I would recommend
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You have some choice in setting your accounting date, but you are governed by Companies House. The LLP will have been allocated an "accounting reference date" when it was set up - the anniversary of the month of formation......

Thanks. That makes a lot of sense now. :)
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