Why do I have two Corporation Tax returns? Accounting periods explained

Why do I have two Corporation Tax returns?

GOV.UK says the period covered by your tax return, your accounting period for Corporation Tax, cannot be longer than 12 months. The HMRC manual puts it the same way: no accounting period can be longer than twelve months, but it may be shorter.

Your first accounts usually run from the day the company was incorporated to its accounting reference date. That is often a little over 12 months. When the accounts cover more than 12 months, you split them into two tax periods and file a return for each. GOV.UK says that if you do, you will also have two payment deadlines.

The second return is often for a short stub period of a few weeks. It is still a separate Company Tax Return, even if little happened in those weeks, with its own Company Tax Return deadline.

Source: Your limited company's first accounts and Company Tax Return

Three dates that are easy to mix up

Much of the confusion comes from three terms that sound alike but mean different things.

In most later years these line up, so you file one set of accounts and one CT600 for the same 12 months. They tend to differ in the first year, and when a company changes its year end.

Source: Accounting periods for Corporation Tax

When a Corporation Tax accounting period starts and ends

If your company started trading on the day it was set up, the first tax period starts on that day. It ends 12 months later, or on the accounting reference date if that comes first. A new tax period then runs to the end of the accounts.

If the company started trading after it was set up, the answer depends on when you told HMRC. GOV.UK says that if you added Corporation Tax services before your accounting reference date, you generally do not file a return for the time the company was dormant. Your returns cover the trading period only. But check the notice to deliver a Company Tax Return you get after your first year. If it covers both the dormant and trading periods, you must file two returns. If you added them after the accounting reference date, you must file two returns: one for the dormant period and one for the trading period.

After the first year, each tax period normally matches your financial year. If you shorten your accounts, the tax period normally ends on the same day, so it is shorter too. You must tell HMRC within 3 months of the start of your tax accounting period once a company within the charge to Corporation Tax becomes active.

Source: First accounts: if you started trading after you set up

Worked example: one set of accounts, two returns

This is GOV.UK's own example for a company that started trading on the day it was set up, 11 May 2024. Its accounting reference date is 31 May 2025, so its first accounts run from 11 May 2024 to 31 May 2025.

That is longer than 12 months, so it files two Company Tax Returns. The return filing deadline is 12 months after each tax period ends. For most companies, tax is due 9 months and 1 day after each tax period ends. Companies with larger profits pay in instalments instead. The payment dates below are the ones GOV.UK gives. The filing dates follow the 12-month rule.

Its first Companies House accounts are due 21 months after the date it registered. From then on, its accounts normally cover 1 June to 31 May.

Source: First accounts: if you started trading on the day you set up

How to work out your own dates

1. Find your accounting reference date and first accounts deadline on your company's page on the Companies House register.

2. Check your Corporation Tax accounting period dates in HMRC's online service, through your business tax account.

3. Note the date the company first started business activity. That can be later than the incorporation date.

4. If the accounts cover more than 12 months, split them: the first 12 months in one return and the rest in a second return.

5. For each tax period, diarise the payment date (9 months and 1 day after it ends, unless you pay in instalments) and the filing date (12 months after it ends). Payment usually comes first.

6. If the dates in your accounting software or HMRC's records are wrong, update the accounting period dates before you file.

Source: Accounting periods for Corporation Tax

If you change your year end

You change your accounting reference date with Companies House, not HMRC. See the rules for changing a company year end for how far you can move it and how often. Our change of year end service can prepare the Companies House filing.

A change at Companies House can still affect your tax periods. GOV.UK says that if you lengthen your financial year to more than 12 months, you must file two returns to cover the period of your accounts. You must contact HMRC before the original filing date of your Company Tax Return, and you may get a late filing penalty if you do not update your accounting period dates. If you shorten it, the tax period normally ends on the same day.

Source: Accounting periods for Corporation Tax

Common mistakes with two Corporation Tax returns

Filing one CT600 for a 13-month first period. A Corporation Tax accounting period cannot be longer than 12 months, so the accounts must be split across two returns.

Paying all the tax on the later date. Each period has its own payment deadline, and in GOV.UK's example the first payment falls weeks before the second.

Treating the second return as optional because the stub period is short or quiet.

Assuming the tax period starts on the incorporation date when the company started trading later.

Confusing HMRC's 1 April financial year, which only sets tax rates, with your company's own financial year.

Source: HMRC Company Taxation Manual CTM01405: accounting periods: apportionment

Where SimpleFilings fits

SimpleFilings does not prepare accounts, CT600 returns or tax calculations. If your company has started or restarted business activity and HMRC does not yet know, we can prepare the active-company notification for you to approve. Our £4.99 SimpleFilings service fee covers that service only. HMRC may still ask for a signed notification or further identity checks.