Understanding accounting periods for Corporation Tax purposes is part of being in business. You will also need to make sense of Company Tax Returns.
TAX ACCOUNTING PERIOD: This guide explains how financial years and accounting periods work.
The charges for Corporation Tax use a specific system of accounting periods. As a rule, they are the same as the accounting years used by Companies House. But, in some cases they may be different.
A Company Tax Return covers the time of the 'accounting period' for Corporation Tax.
It is often the same as the financial year covered by the annual accounts of a company or association. But, it cannot be longer than a 12 months.
Note: The dates may not be the same in your limited company's first accounts and Company Tax Return.
A Corporation Tax accounting period begins as soon as either of these occur:
A Corporation Tax accounting period will end as soon as any of the following occur:
Corporation Tax is payable 9 months and 1 day after the end of the tax period. You must send your accounts to HM Revenue and Customs within 12 months of the end of the tax period.
Accounts prepared for Companies House may not match the accounting period for HMRC. There is no need to prepare a second set of accounts for HMRC. The company can apportion the income from its Companies House period to its tax periods, on a daily basis.
Note: Accounting periods affect Company Tax Returns deadlines for paying Corporation Tax and filing accounts and Company Tax Returns.
You can check the dates of your accounting period by logging in to the secure online service at HM Revenue and Customs.
HMRC will send you a letter after you set up a private limited company for Corporation Tax. The letter gives you dates for your accounting period. Inform them if you believe the dates are incorrect.
What happens when an accounting period is different from the financial year? Check what you need to do if:
An accounting period can also be different to a financial year when the accounts cover:
What happens if your accounts cover more than 12 months? In this case you must file two separate returns. This is because an accounting period cannot be longer than 12 months.
What happens if your accounts cover less than 12 months? In this case the accounting period often ends on the same day. That means it will also be shorter than 12 months.
You should contact HMRC before you prepare your Company Tax Return. You will then get further instructions on how to enter the new dates for your accounting period.
Some small businesses use accounting software to file Company Tax Returns. In this case enter the new dates for the accounting period before you file a return.
Corporation Tax Accounting Period for Tax Returns in the United Kingdom