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.
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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:
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
You'll need to file two Company Tax Returns to cover these two Corporation Tax accounting periods.
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:
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).
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:
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:
For the second accounting period:
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:
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:
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.