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What happens if my accounting period crosses 1 April?

Your profit is split by days.

Corporation Tax rates are set for years that start on 1 April. Your profit is shared between the two years, and each part uses its own year's rates. Today the rates and limits match, so your tax is unchanged.

Published

At a glance

Applies to
Any that crosses 1 April, such as a year to 31 December
What stays the same
One accounting period, one return, and the same payment and
Right now
Rates and limits match either side of 1 April 2026 and 1 April 2027, so the split does not change your tax

Sources

This entry is general information for directors of UK private limited companies, not advice about a particular company.

How it works

Tax rates are set for years that start on 1 April

Corporation Tax rates are set for a "". It runs from 1 April to 31 March, and is named after the year it starts in. So the financial year 2026 runs from 1 April 2026 to 31 March 2027.

But your tax is worked out for your own . A 12-month period that does not start on 1 April falls partly in one financial year and partly in the next. A shorter period can too. The law then shares your profit between the two.

Your accounting period itself is not split. You still file one return for it, and crossing 1 April does not move your payment or .

Sources

The detail The exact rule

Corporation Tax for a financial year is charged on profits arising in the year, but it is calculated, charged and assessed by reference to accounting periods. If an accounting period falls within more than one financial year, the profits must be apportioned between those financial years (Corporation Tax Act 2009, section 8). HMRC's manual says the financial year is named after the calendar year in which it starts (CTM01405). The Corporation Tax Act 2010, section 1119, says "the financial year 2010" means the financial year beginning with April 2010, and similar expressions are read the same way.

Sources

Your profit is shared out by days

Count the days of your period in each financial year. Then share your profit in the same proportion. HMRC says this must be done by days, and no other basis is acceptable.

The rules count days and do not mention weekends or bank holidays. So count every calendar day.

For example

Bramley Studio Ltd's accounting period is 1 January to 31 December 2026, and its profit is £27,500.

1 January to 31 March 2026
£27,500.00 × 90/365
£6,780.82
1 April to 31 December 2026
£27,500.00 × 275/365
£20,719.18
Whole year
£27,500.00

90 days fall in the year starting 1 April 2025, and 275 in the next.

Sources

The detail Time basis

HMRC's manual says the apportionment between financial years is made on a time basis, by reference to days, and no other basis is acceptable (CTM01405). Section 1172 of the Corporation Tax Act 2010 says any apportionment to different periods under the Corporation Tax Acts is made on a time basis according to the respective lengths of the periods, subject to any provision to the contrary. GOV.UK's example is an accounting period of 1 January 2023 to 31 December 2023: the rate for the financial year starting 1 April 2022 for 90 days, and for the year starting 1 April 2023 for 275 days.

Sources

Each part uses its own year's rates

  • Year starting

    1 April 2025

    Small profits rate
    19%
    Main rate
    25%
    Limits
    £50,000 and £250,000
    Fraction
    3/200

  • Year starting

    1 April 2026

    Small profits rate
    19%
    Main rate
    25%
    Limits
    £50,000 and £250,000
    Fraction
    3/200

  • Year starting

    1 April 2027

    Small profits rate
    19%
    Main rate
    25%
    Limits
    £50,000 and £250,000
    Fraction
    3/200

Sources

The figures are the same in all three years. That is why the split does not change your tax today.

Our working: both parts pay the same rate, and the two shares add back up to the whole profit. So the tax is the same as one rate on the whole profit. With , the limits and the also match, so the relief is the same too.

For example

Bramley Studio Ltd's two shares of profit both pay 19%.

1 January to 31 March 2026
£6,780.82 × 19%
£1,288.36
1 April to 31 December 2026
£20,719.18 × 19%
£3,936.64
Tax for 2026
£5,225.00

That is the same as £27,500 × 19%.

If the rate your company pays were different in one of the years, the split would change the total.

Sources

The detail Where the figures come from

The financial year 2025 figures are in HMRC's rates table and manual (CTM03910). For the financial year 2026, Finance Act 2025, sections 13 and 14, set the at 25%, the at 19% and the fraction at 3/200ths. For the financial year 2027, Finance Act 2026, sections 11 and 12, set the same three figures. The £50,000 and £250,000 limits are in the Corporation Tax Act 2010, section 18D, which does not tie them to a financial year. HMRC's rates table has columns for the years starting 1 April 2022 to 2026, and none for 2027.

Sources

If the limits change at 1 April

If the £50,000 or £250,000 limits change from one financial year to the next, the two parts are treated as separate periods. Each part's profit is tested against its own share of that year's limits.

Why a share? The limits are set for a whole financial year. So each part gets the fraction of the limits that matches its days in that year.

If only a rate or the fraction changes, your marginal relief is shared between the two parts instead.

Sources

The detail Changes in the limits, rates or fraction

HMRC's manual (CTM03955): where an accounting period the start of a financial year for which the lower or differ from the preceding year, the two parts are treated as if they were separate accounting periods. Profits are apportioned between them on a strict time basis, and each part's profits are compared with the appropriate fractions of the limits for its financial year. The limits are apportioned by the number of days in the financial year (366 in a leap financial year), while profits are always apportioned by the length of the accounting period. If the fraction or rate changes but the limits stay the same, the marginal relief deduction is apportioned so that the different fractions or rates can be applied.

Sources

Consequences

If you get it wrong

HMRC says profit must be shared by days, and no other basis is acceptable.

Our working: while the figures stay the same, a mistake in the split does not change your tax. If the figures differed, using the wrong year's rate or limit would give the wrong tax on your return.

Sources

Less common situations

Your profit is not over the lower limit. Both parts pay 19%, since the and the rate are the same in both years. For 12 months with no , that limit is £50,000.

Your first period is short and crosses 1 April. The profit is still shared by days. Separately, both limits are cut in proportion, because the period is under 12 months.

You have associated companies. A company that is associated for only part of the period still counts, unless it did no in that part. If your is shared between the two parts, that does not mean the parts are treated separately when dividing the limits.

Your company stops trading part-way through a year. Its ends then. That shorter period gets smaller limits, and it is still split by days if it crosses 1 April.

Sources

The detail Profit tested against the limits

The applies where the company is , is not a close investment-holding company, and its augmented profits do not exceed the lower limit (Corporation Tax Act 2010, section 18A). Augmented profits are taxable total profits plus certain exempt distributions received, other than those section 18L excludes, such as distributions from the company's 51% subsidiaries.

Sources

Worked example: Bramley Studio Ltd

For this example, say Bramley Studio Ltd's is 1 July 2025 to 30 June 2026. Its profit is still £27,500. It is , trades commercially, has no associated company and received no dividends or other distributions.

Sharing the profit

  • 1 July 2025 to 31 March 2026

    Amount
    274 days

    July to March. February 2026 has 28 days

  • 1 April to 30 June 2026

    Amount
    91 days

    30 + 31 + 30

  • Profit in the year starting 1 April 2025

    Amount
    £20,643.84

    £27,500 × 274/365

  • Profit in the year starting 1 April 2026

    Amount
    £6,856.16

    £27,500 × 91/365

Sources

Corporation Tax

  • Tax on the first part

    £3,922.33

    £20,643.84 × 19%

  • Tax on the second part

    £1,302.67

    £6,856.16 × 19%

  • Tax to pay

    £5,225.00

    The same as £27,500 × 19%. £27,500 is under £50,000 in both years

Sources

Deadlines

  • Pay tax by

    Date
    1 April 2027

    It ends on a month end, so tax is due on the first day of the tenth month after

  • File return by

    Date
    30 June 2027

    12 months after the period ends, if HMRC's notice to file came more than 3 months before

Sources

Crossing 1 April does not move either date. Both count from the end of the period.

Sources

Not covered here

How to work out , and how your is set in the first place. See how marginal relief works, your Corporation Tax accounting period and when to pay Corporation Tax.

Where this comes from

47 official sources. Open a group to see them.

The law 20 sources
HMRC 17 sources
GOV.UK 10 sources

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