Accounting periods for Corporation Tax

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

This guide explains what an accounting period is for Corporation Tax purposes, the circumstances in which this might have to change and, if you need to, how to change your accounting period when you file your return.

On this page:

What is an accounting period for Corporation Tax
Accounting periods if your company accounts cover a period shorter or longer than 12 months
When an accounting period changes
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What is an accounting period for Corporation Tax

A Corporation Tax accounting period is different from similar terms used by other 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 and 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) that you file to Companies House. These accounts are sometimes called statutory accounts or audited accounts.

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 - here your Corporation Tax accounting period may start on a different day from the start of your financial year

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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.

If your company accounts cover a period of less than 12 months, then the accounting period will normally end on the date to which you have made up your accounts 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’ll normally have to file two Company Tax Returns for 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 2011 to 31 March 2012, your Corporation Tax accounting periods will be

1 January 2011 to 31 December 2011 (12 months)
1 January 2012 to 31 March 2012 (3 months)

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

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When an accounting period changes

You cannot choose your accounting period. A company’s accounting periods are determined by circumstances and events in the life of the company, such as starting or ceasing to trade, going into liquidation etc.

You must let HMRC know if your company’s circumstances change and you believe that you need to file a return for a different period than HMRC is asking for. This means your return can cover any of the following:

your 'normal' Corporation Tax accounting period
a different accounting period to your normal one, if your circumstances have changed
a completely new accounting period, if your company or organisation has started in business or become active after a period of dormancy

Changing an accounting period online

If you use HMRC's online filing software, and you need to change the accounting period that's shown, or tell HMRC about a new one, you do this by following the 'File a return and accounts' on-screen prompts. You can then download and complete the HMRC online filing software for the changed accounting period.

If you use commercial software, you can provide the accounting period start and end dates as part of the return and depending on your software package, the software may enter this for you automatically.

Whether you use either HMRC's online filing software or commercial software, HMRC will update their records to reflect the change of accounting period when you file your return. But whichever software you use, your accounting period can't be more than 12 months long (although it may be shorter depending on your company or organisation's circumstances).

What to do if a period of account is longer than an accounting period

If you need to file two Company Tax Returns which share a period of accounts, you will need to file a separate CT600 return form for each accounting period, but you only need to include your company accounts - in iXBRL format - with one of the forms.

For example, your company prepares accounts for 18 months from 1 April 2011 to 30 September 2012 and your Corporation Tax accounting periods are:

1 April 2011 to 31 March 2012 (12 months)
1 April 2012 to 30 September 2012 (6 months)

If you're using HMRC's online software, it will show you the accounting periods based on historical information held by HMRC. You can amend those periods by using the 'Change Accounting Period' function (see previous section). You can then select and download the online return form for each accounting period.

For the first accounting period you need only complete:

the accounts template for the whole period of the accounts
the computations for the first accounting period

For the second accounting period:

You don't need to attach the accounts again. Instead, select 'No' to the question 'do you want to use the accounts service?'
Complete the computations template for the second accounting period.
In the 'Final Review' section select 'The period that the accounts are drawn up for differs from the accounting period. The accounts have been or will be sent with a separate CT600 return.' to confirm why you haven't included accounts.

If you're using commercial software, you have three options depending on how your software works:

Option 1: you can follow the same approach as above for HMRC’s online software.

Option 2: for the first accounting period you can attach:

the accounts for a period longer than the first accounting period
separate computations for both accounting periods

For the second accounting period, you'll need to explain that the accounts and computations were attached to the return for the first accounting period:

Select the reason for no accounts as 'The period that the accounts are drawn for up differs from accounting period. The accounts have been or will be sent with a separate CT600 return.'
Then select the reason for no computations as 'The period that the computations are drawn up differs from accounting period. The computations have been or will be sent with a separate CT600 return.'

Option 3:you can attach the accounts and both computations in your returns for the first and second accounting periods.
Please contact your software provider for advice if you need more information about how to use your software.

Find out more about HMRC-tested commercial Company Tax Return software