First accounts and company tax return for a limited company

Our tax preparation specialists tell you how to prepare your first annual accounts and tax return when you set up a limited company

At DSR Tax Refunds Ltd, we know that setting up a limited company can be really complicated. That’s why our experts want to help make life as easy as possible for you by sharing our specialist knowledge with you. So, whether you are wanting more information about VAT or need to know about charitable tax relief, our handy guides are here to help. All our information is based on HMRC sources, so you can rest assured that these guides are filled with helpful and accurate information.

What are the reporting dates for annual accounts and Company Tax Returns?

When you set up a limited company, your accounting dates will be different for your annual accounts to be sent to Companies House and your Company Tax Return which you send to HMRC. Depending on the date you start your limited company, you might have to send two separate tax returns to cover your first business year.

The dates for these will depend on whether your company started trading on the same day it was incorporated (set up) or it started trading later once it had already been set up.

Annual accounts

Your first annual accounts will probably span a longer time period than 1 year (12 months). This is because they will start in the day your company was set up – otherwise known as ‘incorporated’. They will end on the ‘accounting reference date’ set for your company by Companies House. This will be the last day of the month your company was set up.  For example, if you set up your limited company on 8^th June, your accounting reference date will be 30^th June, so you first annual accounts will cover the period from 8^th June to the following 30^th June, so nearly 13 months.

Your following annual accounts will only cover a 12 month period – in the above example, after the first accounts, the following annual accounts will run from 1^st July to 30^th June.

Company Tax Returns

A company tax return can’t be for a period longer than 12 months, so depending on when your limited company is set up, you may require 2 tax returns to cover the period of your first accounts. This will also give you 2 payment deadlines for your first year. In following years, you will only file one account and that will be for the same period as your annual accounts for Companies House.

What happens if you start trading on the same day you set up your limited company?

If you start trading on the same day your limited company is incorporated (set up), you will file 2 Company Tax Returns – 1 for the first 12 months of your company and 1 for the remainder of the time covered by your first annual accounts for Companies House.

So, if we go back to our previous example, the Company Tax Returns would need to be filed as followed:

Event	Date
Your limited company is set up and starts to trade	8th June 2018
End of the first accounting period for Corporation Tax	7th June 2019
Accounting reference date (set by Companies House)	30th June 2019
End of second accounting period for Corporation Tax	30th June 2019

So, your initial annual accounts would run from 8^th June 2018 to 30^th June 2019.

You would file your initial Company Tax Return to cover the period 8^th June 2018 to 7^th June 2019. Your second Company Tax Return would cover the period 8^th June 2019 to 30^th June 2019.

After this initial accounting period, your annual accounts and your Company Tax Returns will cover the same period – 1^st July to 30^th June.

What happens if you start trading at a later date after setting up limited company?

If you incorporate your limited company but don’t start trading at the same time, your company could be classed as ‘dormant’ for Corporation Tax by HMRC. HMRC has detailed guidance on what counts as dormant and what doesn’t with regard to Corporation Tax.

When you register for Corporation Tax, you inform HMRC of the date on which you started to trade.

If you registered for Corporation Tax before your accounting reference date

You usually won’t have to file a Company Tax Return for the period you were dormant and instead, will prepare your tax return for the period in which you were trading. If you were trading for a period of longer than 12 months, you will need to file 2 tax returns in the same way as you would if you started trading on the same day as you incorporated.

Event	Date
Your limited company is set up	8th June 2018
It starts to trade	22nd August 2018
You need to register for Corporation Tax by	22nd September 2018
Accounting Reference Date	30th June 2019

In the above example, you would prepare your annual accounts for Companies House from 8^th June 2018 to 30^th June 2019 and you would file a Company Tax Return to cover the period 22^nd August 2018 to 30^th June 2019.

After the initial accounting period, your annual accounts and Company Tax Return will cover the same accounting period, in our example 1^st July to 30^th June the following year.

You will receive a ‘notice to deliver a Company Tax Return’ when you register for Corporation Tax. If this notice covers your dormant and your trading periods you will have to file 2 Company Tax Returns – one each for your dormant and your trading periods.

If you didn’t register for Corporation Tax before your accounting reference date

You will be expected to file two Company Tax Returns, one for your dormant period and one for your trading period. As our example shows:

Event	Date
Your limited company is set up	8th June 2018
It starts to trade	22nd August 2018
Accounting Reference Date	30th June 2019

You will prepare one set of annual accounts for Companies House, covering the period 8^th June 2018 to 30^th June 2019. You will also file 2 Company Tax Returns – one for 8^th June 2018 to 21^st August 2018 (your dormant period) and the other for 22^nd August 2018 to 30^th June 2019 (your trading period).

After the initial accounting period, your annual accounts and Company Tax Return will cover the same accounting period, in our example 1^st July to 30^th June the following year.

How can DSR Tax Refunds Ltd help?

We know that setting up a limited company can be really hard work – there’s so much to consider and that’s before you filing your annual accounts and submitting your Company Tax Returns. Our friendly team of tax specialists at DSR Tax Refunds Ltd are on hand to help make life easier for you. We’re the experts at identifying your maximum allowable expenses so call us on 0330 122 9972 – we’re the tax experts you can trust.