Financial accounting’ period v SRA reporting period

Question: Do you as a law firm have to change your SRA Accounts Rules reporting period due to changes in UK tax rules?

There are changes coming into effect for UK tax purposes that will impact a lot of law firms who may be looking at changing their financial accounting period for a multitude of reasons.

The question for law firms is do you have to have these two reporting periods aligned? Historically most practices have had the same dates but whether there is a need for this to be the same is not clear in the regulations.

The ICAEW has approached the SRA and confirmed that the practice can have a different reporting date than its financial accounting date.

So if the firm wishes to change its financial reporting period to say a 31st March period this is perfectly acceptable and the SRA do not need to be informed.

However if a firm wishes to keep these date aligned and changes its AR1 reporting date it needs to notify the SRA and a maximum length for the report is 18 months. It can of course be less than 12 months but this does means 2 reports in a fairly short timeframe.

If your thinking of changing your period ends do not forget to check with your accountant to make sure all deadlines are met.