Your limited company’s first accounts and Company Tax Return

Overview

1. Overview

When you set up your limited company, you automatically get different reporting dates for the first:

You may also have to send (‘file’) 2 tax returns to cover your first year in business.

Annual accounts

Your first accounts usually cover more than 12 months. This is because they:

  • start on the day your company was set up (‘incorporated’)
  • end on the ‘accounting reference date’ that Companies House sets for the end of your company’s financial year – this is the last day of the month your company was set up

Example
If your company was set up on 11 May, its accounting reference date will be 31 May the following year. So your company’s first accounts must cover 12 months and 3 weeks.

In following years, your accounts will normally cover your company’s financial year from 1 June to 31 May.

Company Tax Return

The period covered by your tax return (your ‘accounting period’ for Corporation Tax) can’t be longer than 12 months. So you may have to file 2 tax returns to cover the period of your first accounts. If you do, you’ll also have 2 payment deadlines.

In following years you then normally only file one tax return – and it will usually cover the same financial year as your accounts.

What you must do

The dates of your first tax return – and whether you file 2 or one – depend on whether your company:

Trading same day as company set up

2. You started trading the day your company set up

File 2 Company Tax Returns if your company started trading on the same day it was set up – one for your company’s first 12 months and one for the rest of the time covered by your company’s first accounts.

Example

Action Date
Company set up and started trading 11 May 2013
First accounting period for Corporation Tax ends 10 May 2014
Accounting reference date 31 May 2014
Second accounting period for Corporation Tax ends 31 May 2014

Prepare your first set of accounts for 11 May 2013 to 31 May 2014. Then file your:

  • first tax return for 11 May 2013 to 10 May 2014
  • second tax return for 11 to 31 May 2014

After you do this, your accounts and tax returns will normally cover your company’s financial year from 1 June to 31 May.

Trading after company set up

3. You started trading after your company set up

Limited companies can be ‘dormant’ for Corporation Tax between setting up (‘incorporating’) and starting to trade for the first time.

HM Revenue and Customs (HMRC) has detailed guidance on what counts as dormant for Corporation Tax.

You tell HMRC the date that you started to trade when you register for Corporation Tax.

What you have to do if your company was dormant depends on whether you registered for Corporation Tax before your accounting reference date.

You registered for Corporation Tax before your accounting reference date

You usually:

  • don’t file a tax return for the period you were dormant
  • prepare your first tax return to cover the period you were trading

File 2 tax returns if you were trading for more than 12 months – one for the first 12 months of trading and one for the rest of the time.

Example

Action Date
Company set up 11 May 2013
Started trading 22 July 2013
Register for Corporation Tax 26 August 2013
Accounting reference date 31 May 2014

Prepare accounts for 11 May 2013 to 31 May 2014. Then file one tax return for your trading period from 22 July 2013 to 31 May 2014.

After you do this, your dates for accounts and tax returns will normally match your company’s financial year from 1 June to 31 May every year.

Check the ‘notice to deliver a Company Tax Return’ you get after your first year. If it covers your dormant and trading periods you must file 2 tax returns – one for your trading period and one for your dormant period.

You didn’t register for Corporation Tax before your accounting reference date

You must file 2 tax returns – one for the period you were dormant and one for the period you were trading.

Example:

Action Date
Company set up 11 May 2013
Started trading 22 July 2013
Accounting reference date 31 May 2014

Prepare one set of accounts for 11 May 2013 to 31 May 2014. Then file your:

  • first tax return for your dormant period from 11 May to 21 July 2013
  • second tax return for your trading period from 22 July 2013 to 31 May 2014

After you do this, your dates for accounts and tax returns will normally match your company’s financial year from 1 June to 31 May every year.

Last updated: 25 October 2016

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