What is my Corporation Tax accounting period, and why can it differ from my accounts?

"Period of account" means any period for which a company draws up accounts (Corporation Tax Act 2010, section 1119). "Accounting period" is read in accordance with Chapter 2 of Part 2 of the Corporation Tax Act 2009. GOV.UK says the accounting period is the time covered by your tax return. It cannot be longer than 12 months, is normally the same as the financial year covered by your annual accounts, and may be different in the year you set up your company.

SourcesThe law·GOV.UK

An accounting period begins when the company comes within the charge to Corporation Tax, or immediately after the end of the previous accounting period if the company is still within the charge. A UK resident company is treated as coming within the charge when it starts to carry on business, if it would not otherwise be within the charge (Corporation Tax Act 2009, section 9). HMRC's manual says the most common ways a company first comes within the charge are becoming UK resident or acquiring a source of income (CTM01410). If a chargeable gain or allowable loss arises before any accounting period has started, a period begins at that time. HMRC says a company has not become active if it has not engaged in any business activity, and pre-trading activities or expenditure do not by themselves start trading.

SourcesThe law·HMRC·GOV.UK

Section 10 of the Corporation Tax Act 2009 ends an accounting period on the first occurrence of: the end of 12 months from its start; an accounting date of the company; the end of a period for which the company does not make up accounts; the company starting or ceasing to trade; the company coming, or ceasing to be, within the charge in respect of its trade or all its trades; the company becoming or ceasing to be UK resident; the company ceasing to be within the charge; and the company entering or leaving administration. Section 12: an accounting period ends immediately before a winding up starts, and a new one begins when it starts.

SourcesThe law

HMRC's manual says the profits of a period of account longer than 12 months are apportioned to the accounting periods, usually on a time basis. But each accounting period's profits may instead be computed from the transactions in it, where that gives a more accurate result (CTM01405). Where the period of account is not longer than 18 months, the filing date for each return is the last day of whichever ends last: 12 months from the end of the accounting period, 12 months from the end of that period of account, and 3 months from the date the notice requiring the return was served (Finance Act 1998, Schedule 18, paragraph 14; CTM93030).

SourcesThe law·HMRC

Under the Finance Act 2004, section 55, a company must give HMRC notice of the beginning of its first accounting period, and of any later period that does not immediately follow the end of a previous one. The notice must be in writing, must state when the period began, and must be given not later than three months after it begins. A company with a reasonable excuse is not treated as failing until the excuse ends, provided it then gives notice without unreasonable delay. For newly incorporated companies, HMRC's COTAX Manual (COM1040) says form CT41G is issued the day after the record is set up, and advises them of these duties.

SourcesThe law·HMRC