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How to prepare for the end of your First Year of Trading

Running a Business
How to prepare for the end of your First Year of Trading

At the end of your First year of Trading you need to file annual accounts. This article will help you prepare for the end of your first accounting period.

At the end of your first year of trading, it is important to  know that Companies House and HMRC are two separate entities with different filing requirements. Companies House is the public register where you submit annual accounts, and those are available for the public to view.

On the other hand, HMRC is the Tax authority to which you submit corporation tax returns, accompanied by full set of accounts (Income statement and Balance sheet).


What happens after I incorporate my company?

Within 14 days of incorporating your company at Companies House, you should receive your 10-digit UTR number issued by HMRC sent to the company’s registered address. If you have not received a UTR, you can request it here.

You will have to create a government gateway account with HMRC separately, as registering your company at Companies House will not automatically register you for corporation tax.  This is something you will need to do before the end of your first accounting period. You will also need to do this if you need to pay yourself or staff through PAYE or need to become VAT registered.


How to set up a Government Gateway Account?

1) Create a gateway account at  HMRC website, you can do this here.

2) Then please click on the green 'Sign in' button. 

3) Click on 'Create sign in credentials'.

4) Enter your email address - you will receive a confirmation email sent to you. 

5) You will then be issued with User ID for your company's gateway account.


How to request a corporation tax activation code?

Once your company’s HMRC government gateway account has been created, you will have to request a corporation tax activation code, which will allow you to file your corporation tax returns (CT600) electronically.

To request the code, please log in your account and click on ‘Get online access to a tax, duty or a scheme’. Then, select ‘Corporation tax’.

Easy Digital Tax and accounting information -  CT600

End of First Year of Trading Filing Requirements

Your first year of trading usually cover more than 12 months, because the period starts on the date the company was incorporated and ends on the ‘accounting reference date’ that Companies House sets for the end of the first accounting period – usually the last date of the month the company was set up.  Therefore your annual accounts will be from the date of incorporation to the last day of the month a year on after incorporation.

For HMRC, they do not accept corporation tax returns CT600 to cover a period longer than 12 months, therefore in the first accounting period you will need to file 2 CT600 s  - one CT600 covering the full 12 months and a second for the reminder to the end of the month. However your full annual accounts can cover the whole period.

What about due dates?

At the end of your first accounting period - You must file your annual accounts to Companies House within 21 months after incorporation.   You have 12 months from the end of your  first year accounting period to file your CT600s and full account to HMRC to report your first year of trading.


When is Corporation tax due?

You have 9 months + 1 day after your accounting period end date to pay your corporation tax to HMRC. 

Author: Lyubka Rizova

Lyubka is one of our Digital Accountants specialising in Small and Micro Accounting and Corporation Tax. She holds a First class Degree in Accounting and Finance and is an active contributor to our knowledge base articles. When not delivering a first class service she likes to exercise and travel.

Read All articles by Lyubka Rizova
This article is information only and has been prepared for general guidance on matters of interest only, and does not constitute legal, accounting, tax, investment or other professional advice or services. You should not act upon the information contained in this article without obtaining specific professional or legal advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this article, and, to the extent permitted by law, Comdal Limited, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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