Accounting period for corporation tax

Your company or organisation pays Corporation Tax on taxable profits for each Corporation Tax accounting period.

A Corporation Tax accounting period is different from similar terms used by other HM Revenue & Customs (HMRC) tax areas - such as VAT accounting periods - or other government agencies - such as Companies House accounting reference periods.

Your company or organisation's Corporation Tax accounting period is normally 12 months long. This accounting period normally matches your company's 12 month financial year. Your company's financial year begins and ends with the dates covered by your company's annual report and accounts (financial accounts) as submitted to Companies House. These accounts are sometimes called statutory accounts or audited accounts.

But in some instances your Corporation Tax accounting period won't be the same as your company's financial year if for example:

  • your accounts cover a period of more than 12 months - such as if your newly-formed company is preparing its first accounts to cover a period of more than 12 months, or your existing company changes its financial year end
  • your company has been dormant and once again starts to carry on business activity, your Corporation Tax accounting period may start on a different day from the start of your financial year

Accounting periods if your company accounts cover a period shorter or longer than 12 months

A Corporation Tax accounting period can be shorter than 12 months. For example, if your company accounts cover a period of less than 12 months, then the accounting period can be the same and you'll simply file one Company Tax Return covering that period.

A Corporation Tax accounting period can't be longer than 12 months. If your company accounts cover a period longer than 12 months and your company is active throughout, you must file two Company Tax Returns because you'll have two Corporation Tax accounting periods. This is the case even though you only need to file one set of accounts at Companies House:

  • The first accounting period covers the first 12 months
  • The second accounting period covers the rest of the time

For example, if your company has its accounts prepared for 15 months from 1 January 2008 to 31 March 2009, your Corporation Tax accounting periods will be:

  • 1 January 2008 to 31 December 2008 (12 months)
  • 1 January 2009 to 31 March 2009 (3 months)

You'll need to file two Company Tax Returns to cover these two Corporation Tax accounting periods.

SMEs, businesses and companies in the UK are increasingly falling prey to corporation tax debt and are turning to our advice teams for assistance .We offer a range of solutions tailored to the tax needs of small business and companies. Contact us online using our online tax enquiry form or alternatively call us today.