Your limited company's first accounts and Company Tax Return

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You started trading after your company set up

Limited companies can be ‘dormant’ for Corporation Tax between setting up (‘incorporating’) and starting to trade for the first time.

HM Revenue and Customs (HMRC) has detailed guidance on what counts as dormant for Corporation Tax.

You tell HMRC the date that you started to trade when you register for Corporation Tax.

What you have to do if your company was dormant depends on whether you registered for Corporation Tax before your accounting reference date.

You registered for Corporation Tax before your accounting reference date

You usually:

  • do not file a tax return for the period you were dormant
  • prepare your first tax return to cover the period you were trading

File 2 tax returns if you were trading for more than 12 months - one for the first 12 months of trading and one for the rest of the time.

Example

Action Date
Company set up 11 May 2013
Started trading 22 July 2013
Register for Corporation Tax 26 August 2013
Accounting reference date 31 May 2014

Prepare accounts for 11 May 2013 to 31 May 2014. Then file one tax return for your trading period from 22 July 2013 to 31 May 2014.

After you do this, your dates for accounts and tax returns will normally match your company’s financial year from 1 June to 31 May every year.

Check the ‘notice to deliver a Company Tax Return’ you get after your first year. If it covers your dormant and trading periods you must file 2 tax returns - one for your trading period and one for your dormant period.

You did not register for Corporation Tax before your accounting reference date

You must file 2 tax returns - one for the period you were dormant and one for the period you were trading.

Example:

Action Date
Company set up 11 May 2013
Started trading 22 July 2013
Accounting reference date 31 May 2014

Prepare one set of accounts for 11 May 2013 to 31 May 2014. Then file your:

  • first tax return for your dormant period from 11 May to 21 July 2013
  • second tax return for your trading period from 22 July 2013 to 31 May 2014

After you do this, your dates for accounts and tax returns will normally match your company’s financial year from 1 June to 31 May every year.