New companies: a long first year can need two tax returns

A company's first accounts often run past 12 months, but a Corporation Tax period never does. The first-year dates every new director should diary.

A new limited company's first accounts can cover more than 12 months, but a Corporation Tax accounting period can never be longer than 12. So the first set of accounts can need two Company Tax Returns, each with its own payment date. HMRC's guidance on accounting periods says it plainly: if your accounts cover more than 12 months, you must file two returns.

For a new director that is the first of several dates that do not line up the way people expect.

The dates in year one

Corporation Tax registration. Tell HMRC within three months of the company starting to do business. HMRC counts buying, selling, advertising, renting a property and employing someone as doing business.
Confirmation statement. At least one every 12 months, filed no more than 14 days after the review period ends, with a £50 fee online.
First accounts. Where they cover more than 12 months, Companies House needs them within 21 months of incorporation, or three months after the accounting reference date if that is later.
Corporation Tax payment. Nine months and one day after the end of each accounting period.
Company Tax Return. Twelve months after the end of each accounting period.

The payment falls due three months before the return, so the profit has to be worked out well before anyone files anything.

One company's first 21 months

Illustration, not a real company. Aisha forms a design company in Hayes on 15 June 2026 and starts trading the same day. Its first accounts run from 15 June 2026 to 30 June 2027, just over 12 months.

Corporation Tax splits that into two periods: 15 June 2026 to 14 June 2027, and 15 June 2027 to 30 June 2027.
The first period makes £40,000 of profit. At the 19 per cent small profits rate, that is £7,600 of Corporation Tax, due on 15 March 2028.
The first accounts are due at Companies House 21 months after incorporation, also 15 March 2028, because that is later than three months after 30 June 2027.
The second, 16-day period has its own return and its own payment date shortly after.

So on one day in March 2028 the company has to deliver its first accounts and pay its first tax bill. Both depend on the same figures, which is why the books need to be finished by Christmas, not by spring.

What late costs

Companies House charges a private company £150 for accounts up to a month late, rising to £375, £750 and then £1,500 for more than six months. HMRC charges £200 for a Company Tax Return a day late and another £200 at three months, then a percentage of the unpaid tax from six months. HMRC can also charge interest on Corporation Tax paid late. The fixed penalties apply even if the company made a loss.

Two habits worth starting now

Keep company money and personal money apart from day one. Money taken out that is not salary, a dividend or a repaid expense becomes a director's loan, with its own tax rules.
When HMRC writes with your accounting period dates, check them against your accounts. HMRC's guidance asks you to tell it if they look wrong.

Our first-year checklist for new companies sets out these dates in one place, and our page for limited companies covers what we file and when. Write down the end date of each Corporation Tax period, not just the accounts date, the week the company is formed.

About the author

Harvey Dhillon is Founder and CEO of Zmartly, an accountancy firm for small businesses. He grew up in West London and began his career in finance at Barclays, in investment banking and wealth management, before going full-time on Zmartly in 2020.

Featured photo by Kampus Production on Pexels.