If you’re head of a UK-based firm, you’re legally required to pay corporation tax. This is why Prestige Tax and Trust Services has decided to answer an important question; what is the accounting period for corporation tax?
When you send your company tax returns, you’re required to work out the corporation tax your firm owes the government. The deadline by which you pay your corporation tax bill is determined by the accounting period covered in your company tax returns.
The accounting period can’t legally be longer than 12 months, and is usually the same length of time as the financial year covered by your business’ annual accounts. Although it’s important to note that your accounting period may be different for the year you established your firm.
How to check
This means that you will need to check your accounting period for corporation tax every time you complete company tax returns. You can do this by using HM Revenue of Customs’ (HMRC) online service.
You don’t need to use HMRC’s online service, however, to find out your first accounting period. The organisation will send you a letter which details the dates of your first accounting period after you register your business for corporation tax. We should note that you’re legally obligated to inform HMRC if you think the dates they’ve provided are incorrect.
There are certain circumstances where your accounting year and financial year will be different, such as in your first year of trading, when you restart your firm, or if you stop trading and become dormant. What you need to do in each of these circumstances can be found in the links above.
The years will also differ if your accounts cover more than 12 months. In this instance you’ll be required to send two company tax returns, as your accounting year can’t be longer than 12 months. The years will also differ if your accounts cover less than 12 months e.g. if you close your firm. In this instance you’ll need to log into HMRC’s online service, which we mentioned above, and enter the new dates to determine your accounting period, before you complete your company tax return.
Prestige Tax and Trust Services
You need know your firm’s accounting period for corporation tax to ensure you pay your bill on time. As a business owner, you should strive to safeguard your firm in every circumstance, which is why you may wish to come to Prestige Tax and Trust Services. Our business protection team will ensure you write a will that shields your firm after you pass way.