Key facts
- An accounting period for Corporation Tax can be a maximum of 12 months.
- Most companies align their accounting period with their financial year end (e.g. 31 March or 31 December).
- A “period of account” longer than 12 months is split into two separate CT accounting periods.
- The first accounting period begins when the company starts trading, receives income, or becomes UK-resident.
How Accounting Periods Determine When You Pay CT
An accounting period (AP) is the time span for which a company calculates its Corporation Tax liability. Each AP has its own tax computation, its own CT600 return, and its own payment deadline.[1]
The accounting period is not always the same as the company’s period of account (the period covered by its statutory accounts). While a company can prepare accounts for any length of time, an accounting period for CT purposes can never exceed 12 months.
When Periods Start and End
An accounting period begins when a company:[3]
- Starts to carry on a trade or business activity
- Becomes UK-resident
- First has income or gains chargeable to CT (even without trading)
- Immediately after a previous accounting period ends
An accounting period ends on the earliest of:
- 12 months after it began
- The company’s accounting reference date (financial year end)
- The company starting or ceasing to trade
- The company becoming or ceasing to be UK-resident
- The company entering or leaving a group in certain circumstances
Long Periods of Account
A company might prepare accounts for a period longer than 12 months — for example, an 18-month set of accounts when changing its year end. For Corporation Tax purposes, this must be split into two accounting periods:[1]
| Period of Account | CT Accounting Period 1 | CT Accounting Period 2 |
|---|---|---|
| 18 months (e.g. 1 Jan 2025 – 30 Jun 2026) | First 12 months (1 Jan 2025 – 31 Dec 2025) | Remaining 6 months (1 Jan 2026 – 30 Jun 2026) |
| 15 months (e.g. 1 Apr 2025 – 30 Jun 2026) | First 12 months (1 Apr 2025 – 31 Mar 2026) | Remaining 3 months (1 Apr 2026 – 30 Jun 2026) |
Each period requires a separate CT600 return, and profits must be apportioned between the two periods. Trading profits are normally split on a time basis, while capital gains fall into the period in which the disposal occurs. Both returns can be prepared and submitted online.
Tip: A short accounting period (less than 12 months) does not need to be split — it simply forms a single accounting period in its own right. However, the Corporation Tax thresholds for the small profits rate are reduced proportionally for short periods.[1]
Your First Accounting Period
A newly incorporated company’s first accounting period begins when it starts trading or first receives chargeable income. This is often not the date of incorporation — many companies are incorporated weeks or months before they start doing business.[3]
The first period ends on the company’s chosen accounting reference date. If the company was incorporated on 1 July 2025 and chose 31 March as its year end, the first accounting period would run from the date trading started to 31 March 2026 (assuming trading started within 12 months of that date).
Common year ends: 31 March (aligns with the financial year for CT rate purposes), 31 December (calendar year), and 5 April (aligns with the personal tax year). Choosing 31 March simplifies Corporation Tax calculations because the CT rate changes on 1 April.
Changing Your Year End
A company can change its accounting reference date at Companies House by filing a form AA01. This affects future Corporation Tax accounting periods. Key points:[2]
- You can extend your accounting period once every five years (up to a maximum of 18 months from the start of the current period)
- You can shorten your accounting period at any time
- Extending creates a long period of account, which will be split into two CT accounting periods
- Separate CT600 returns must be filed for each resulting accounting period
Frequently Asked Questions
How long can a Corporation Tax accounting period be?
A Corporation Tax accounting period can be a maximum of 12 months. If a company prepares accounts for a longer period, it must be split into two separate accounting periods for CT purposes.
What happens if my company accounts cover more than 12 months?
A period of account longer than 12 months is automatically split into two CT accounting periods — the first covering 12 months and the second covering the remainder. Each period requires its own CT600 return.
When does a company’s first accounting period start?
A company’s first accounting period begins when it starts trading, becomes UK-resident, or first receives income or gains chargeable to Corporation Tax — which is often not the same as the date of incorporation.
Can I change my company’s accounting year end?
Yes. A company can change its accounting reference date by filing form AA01 at Companies House. You can shorten your period at any time, but you can only extend it once every five years, up to a maximum of 18 months.
Further Reading
- Filing Deadlines — when your CT600 and accounts are due
- The CT600 Tax Return — what goes into your Company Tax Return
- Corporation Tax Rates — how rates and thresholds apply per accounting period
- Setting Up a Company & Tax — getting started with your first period
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Sources
- Corporation Tax: accounting periods — GOV.UK
- Company Tax Returns — GOV.UK
- Company Taxation Manual: accounting periods — HMRC