Financial Year End Change

What you need to know

A financial year is a consecutive 12 month period during which time a company must complete it financial statements.

Most companies in South Africa default their financial year end to February to coincide with the country’s financial year.

However, some businesses may elect a different Financial Year to accommodate their own business cycles.

CIPC must be informed of changes to a company’s Financial Year which is a simple process.

Good to know

The Company`s Annual Returns must be up to date to effect the Financial Year End Change.

Price : R390
How long does it take? 1 Day

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021 595 4433

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info@swiftreg.co.za

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Frequently Asked Questions

Is a financial year the same as a tax year?

Yes and no. Strictly speaking a financial year refers to companies while a tax year refers to both individuals and companies. In South African the dates for a tax year for individuals are set and permanently run from 1 March to the last day of February the following calendar year. Companies, however, can choose which month they would like to start their financial year which runs for twelve consecutive months from that date. A company’s financial year will become its tax year and this is how the terms are often used interchangeably.

What is the financial year in South Africa?

A financial year for companies runs for 12 consecutive months. A company can choose the month when it would like to start its financial year which will run for twelve consecutive months. The company must complete all of its financial statements before the financial year ends and lodge them with the tax authorities to determine the amount of tax due. The financial year must be registered with CIPC. Most companies choose to coincide the company’s financial year with the tax year for individuals as this simplifies the tax calculations.

What is the definition of a financial year?

A financial year is a consecutive 12 month period during which time a company must complete it financial statements.

Can a company choose when to start its financial year?

Yes in South Africa, companies can choose when to start their financial year. This is very useful as certain companies are seasonal in nature, for example farmers or companies in the tourism industry. This will allow these companies to complete their financial year end when the business is not so bus y allowing owners to focus on stock takes, closing off their books and finalising the financial records. Individuals cannot change their tax year.

Why do most company choose the financial year to start on 1 March?

This is to simplify their employees tax calculations as individuals tax year runs from the 1 March to the end of February in the next calendar year. This is referred to as the individuals tax year. The tax tables are adjusted each year during the budget speech. If the company does not synchronize their financial year with the individual tax year the company will have to apply the old tax tables up to the end of February and then the new tax tables from the 1 March during their financial year.

Can you change your financial year end?

Yes, but only once during the financial year. It can also not be extended for longer than 15 months from the original start date, so in effect you canno t extend the financial year for longer than 3 months. The financial year can also not be back dated.

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