When is Corporation Tax Due?

Your 'accounting period' for Corporation Tax is the duration covered by your Company Tax Return. This period plays a crucial role in determining deadlines for both paying Corporation Tax and filing your Company Tax Return.

Key Points about the Accounting Period

1. Duration:

• The accounting period cannot exceed 12 months.

• It typically aligns with your company’s financial year but may differ in your company’s first year.

2. First Accounting Period:

• Upon registering your company for Corporation Tax, HMRC will send you a letter specifying your accounting period dates.

• If these dates are incorrect, you should notify HMRC.

3. Checking Your Accounting Period:

• Sign in to your business tax account on HMRC’s online service to verify your accounting period dates.

Different Scenarios for Accounting Periods

1. Accounting Period Differs from Financial Year:

• This can occur in various situations such as during your first year of business, when restarting your business, or if your company becomes dormant.

• It may also differ when your accounts cover more than or less than 12 months.

2. Accounts Cover More Than 12 Months:

• You must file two returns because the accounting period cannot exceed 12 months.

• Update your accounting period dates with HMRC before the original filing date of your Company Tax Return.

Example: If your company’s year-end is 31 December 2023, and you extend it to 31 March 2024, you need to update HMRC before 31 December 2024 and file all returns by 31 March 2025.

1. Accounts Cover Less Than 12 Months:

• The accounting period typically ends on the same day, making it shorter than 12 months.

• Use HMRC’s online service or your accounting software to update your accounting period dates before filing your return.

Filing and Payment Deadlines

• Filing Deadlines:

• Your Company Tax Return must be filed 12 months after the end of the accounting period it covers.

• Payment Deadlines:

• Corporation Tax must be paid nine months and one day after the end of your accounting period.

Updating Your Accounting Period

1. For Longer Periods:

• Contact HMRC to update your accounting period if your company’s financial year has been lengthened.

• Ensure this is done before the original filing date to avoid late filing penalties.

2. For Shorter Periods:

• Update your accounting period dates using HMRC’s online service or your accounting software before filing your return.

Potential Penalties

• Late Filing Penalties:

• Failure to update your accounting period dates or missing filing deadlines can result in penalties.

Summary                                             

Your accounting period for Corporation Tax is a critical aspect of your company’s financial obligations. Ensure that you:

• Check and confirm your accounting period dates through HMRC’s online service.

• Update HMRC if there are changes in your accounting period, especially if your financial year is lengthened or shortened.

• Adhere to filing and payment deadlines to avoid penalties.

• Use appropriate methods (HMRC’s online service or accounting software) to manage and update your accounting period dates as needed.

By staying informed and proactive about your accounting period, you can efficiently manage your Corporation Tax responsibilities.

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