Accounting period vs financial year vs tax year: explained

In short: A company's accounting period is the time one Company Tax Return (CT600) covers, and it can't be longer than 12 months (GOV.UK: Accounting periods for Corporation Tax). The Corporation Tax financial year runs from 1 April to 31 March and decides which tax rates apply. The tax year, 6 April to 5 April, is for individuals' Income Tax.

Not sure Taxley fits your company? Take the 30-second check to see whether Taxley fits your company, or work out each period's dates with the Corporation Tax deadline calculator.

Key facts (checked on 29 September 2026)

What's the difference between an accounting period, a financial year and a tax year?

An accounting period is the stretch of up to 12 months that one Company Tax Return (CT600) covers. The Corporation Tax financial year runs from 1 April to 31 March and fixes the rates. The tax year runs from 6 April to 5 April and is for individuals' Income Tax, not company profits (GOV.UK: Accounting periods for Corporation Tax).

This table compares the six date terms a UK limited company works with:

Much of the confusion comes from "financial year", which has two legal meanings. Under section 390 of the Companies Act 2006, a company's financial year is its own accounts year: it runs to the last day of its accounting reference period, or to a date up to 7 days either side that the directors choose (CA 2006 s390). GOV.UK uses that meaning when it says the Corporation Tax accounting period is normally the same 12 months as the company financial year covered by the annual accounts (GOV.UK: Accounts and tax returns for private limited companies). Tax law uses the other meaning. The Interpretation Act 1978 defines a financial year for central taxes as the twelve months ending with 31 March (Interpretation Act 1978 Sch 1). So "our financial year ends on 30 June" and "financial year 2026" are both correct, and they describe different periods.

The terms fit together in a fixed order. The company prepares accounts for its period of account, and Corporation Tax is then calculated, charged and assessed by reference to accounting periods (CTA 2009 s8). Each accounting period gets its own CT600, payment date and filing date. When an accounting period falls in two Corporation Tax financial years, its profits are divided between them to apply each year's rates, but it stays one return. The accounting reference date sits one step earlier in the chain: it fixes when each period of account ends, and so where most accounting periods end too. The tax year enters only when money reaches a person, such as a director's salary or dividends.

What is a period of account?

A period of account is the period a company's accounts cover. HMRC defines it as "the period for which a company prepares its accounts" (CTM01405). It is usually 12 months, but first accounts, or accounts after the year end is extended, can run to 18 months, longer than any Corporation Tax accounting period.

The Companies Act 2006 fixes how long a period of account can be. A company's first accounting reference period starts on the day it's incorporated and ends on its accounting reference date, and must be more than 6 months and no more than 18 months long (CA 2006 s391). Later periods run for 12 months from one accounting reference date to the next. Directors can end the accounts on any date up to 7 days either side of the accounting reference date, which is why some companies make up accounts to a fixed weekday, such as the last Friday in June (CA 2006 s390). A company can also shorten or extend a period on form AA01, with an extension limited to 18 months (CA 2006 s392). The Corporation Tax Act 2010 defines a period of account simply as any period for which accounts are drawn up (CTA 2010 s1119).

The period of account is what Companies House receives: one set of accounts, whatever its length. The CT600 asks for something different. HMRC's form guide says boxes 30 and 35 take the start and end dates of the period for which the company is making the return (HMRC's CT600 guide), and that period is the accounting period. For a 12-month period of account the two sets of dates are the same, so most directors never notice the difference. It shows up when the accounts run longer than 12 months, because the accounts then cover more than one Corporation Tax return, and HMRC's manual explains how the profits of such a period are apportioned between the returns (CTM01405).

What is a company accounting period for Corporation Tax?

A company's accounting period for Corporation Tax is the period one Company Tax Return (CT600) covers. It can't be longer than 12 months and normally matches the company's accounts year. Section 9 of the Corporation Tax Act 2009 sets when it starts, and section 10 sets the events that end it (CTA 2009 s10).

An accounting period starts when the company comes within the charge to Corporation Tax, or immediately after its previous accounting period ends if it is still within the charge. A UK resident company is treated as coming within the charge when it starts to carry on business (CTA 2009 s9), so a company formed in May that stays dormant until it starts business in August usually has no accounting period before August. An accounting period ends on the first of these events: 12 months from its start, an accounting date of the company, the end of a period for which no accounts are made up, the company starting or ceasing to trade, becoming or ceasing to be UK resident, ceasing to be within the charge to Corporation Tax, or entering or leaving administration (CTA 2009 s10). A company being wound up follows separate rules in section 12.

Every Corporation Tax deadline hangs off the accounting period. The tax is due 9 months and 1 day after the end of the accounting period for a company with taxable profits up to £1.5 million (GOV.UK: Pay your Corporation Tax bill: Overview), and the Company Tax Return is due 12 months after the end of the accounting period it covers (GOV.UK: Company Tax Returns: Overview). If the period is shorter than 12 months, the £50,000 and £250,000 marginal relief limits are reduced proportionately (GOV.UK: Marginal Relief for Corporation Tax). HMRC's notice to deliver a return, form CT603, names a period of no more than 12 months that ends on the same date as an accounting period on HMRC's record (COM130130), and a company must make a separate return for each accounting period that ends in the period on the notice (CTM93020).

What does accounting reference date mean?

The accounting reference date is the day and month on which a company's accounts year ends every year. Companies House sets it when the company is incorporated: the last day of the month in which the anniversary of incorporation falls (CA 2006 s391). A company set up on 11 May gets 31 May, and form AA01 changes it.

GOV.UK describes the accounting reference date as the date Companies House sets for the end of the company's financial year, and gives the example of a company incorporated on 11 May whose accounting reference date is 31 May the following year (GOV.UK: Your limited company's first accounts and Company Tax Return). The date drives the Companies House deadlines. A private company files its first accounts within 21 months of registering with Companies House, and later accounts within 9 months of the end of its financial year (GOV.UK: Accounts and tax returns for private limited companies). Because the first accounting reference period runs from incorporation to the end of the month of the first anniversary, first accounts usually cover a little more than 12 months: a company incorporated on 15 June 2025 has an accounting reference date of 30 June, so its first accounts run from 15 June 2025 to 30 June 2026.

The accounting reference date belongs to Companies House, not HMRC. HMRC keeps its own record of the company's accounting periods, and GOV.UK warns that a company may get a late filing penalty if it doesn't update its accounting period dates with HMRC after a change (GOV.UK: Accounting periods for Corporation Tax). On the company's Companies House page, the accounts section shows a "Next accounts made up to" date and the date they're due by; the day and month of the made-up-to date is normally the accounting reference date. Changing that date is covered in the guide to changing your company year end on form AA01.

What is the financial year for Corporation Tax?

The financial year for Corporation Tax runs from 1 April to the following 31 March and is named after the year it starts in, so financial year 2026 runs from 1 April 2026 to 31 March 2027. Corporation Tax rates are set for each financial year: 25% main rate and 19% small profits rate in both 2025 and 2026 (GOV.UK: Corporation Tax rates and allowances).

Section 8 of the Corporation Tax Act 2009 ties the charge to financial years: "Corporation tax for a financial year is charged on profits arising in the year." If a company's accounting period falls in more than one financial year, the profits chargeable for that accounting period must be apportioned between the financial years (CTA 2009 s8), and apportionments under the Corporation Tax Acts are made on a time basis, by the lengths of the periods (CTA 2010 s1172). The naming rule is in section 1119 of the Corporation Tax Act 2010, where "the financial year 2010" means the financial year beginning in April 2010 (CTA 2010 s1119).

HMRC's rates table, headed as rates for Corporation Tax years starting 1 April, shows the same figures for financial years 2023, 2024, 2025 and 2026: a 25% main rate, a 19% small profits rate, a £50,000 lower limit, a £250,000 upper limit and a marginal relief fraction of 3/200, against a single 19% main rate for financial year 2022 (GOV.UK rates). The split between financial years mattered most recently in 2023. GOV.UK's example is an accounting period from 1 January 2023 to 31 December 2023, which paid the financial year 2022 rate for 90 days and the financial year 2023 rates for 275 days (GOV.UK: Corporation Tax rates, expenses and reliefs: Rates). Financial year 2022 had a single 19% rate, while financial year 2023 brought in the 25% main rate and marginal relief, so a company with profits over £50,000 paid a blend of the two regimes.

How does a 30 June 2026 year end straddle two financial years?

A company with a 30 June year end has an accounting period, 1 July 2025 to 30 June 2026, that falls in two Corporation Tax financial years: 274 days in FY2025 and 91 days in FY2026. Profits are split by days between them, but both years charge 25% and 19%, so this time the split changes nothing.

Taxley's worked example (an illustration, not a real company) splits the accounting period 1 July 2025 to 30 June 2026 at 1 April 2026:

Suppose the company's taxable profits for the period are £73,000. Apportioned by days, £54,800 falls in financial year 2025 and £18,200 in financial year 2026, and the £50,000 and £250,000 marginal relief limits are divided the same way. Worked as one figure, the tax is 25% of £73,000, which is £18,250, less marginal relief of 3/200 × (£250,000 − £73,000), which is £2,655, leaving £15,595. Worked as two slices, the answer is the same £15,595, because both financial years have the same rates, limits and fraction (GOV.UK rates). The CT600 still reports the two years separately: HMRC's guide asks for the profit chargeable at each rate and the tax for each financial year (HMRC's CT600 guide). It remains one return, with tax payable by 1 April 2027 and the return due by 30 June 2027.

Capital allowances are where 1 April 2026 does change the numbers. Section 28 of the Finance Act 2026 cut the main pool writing-down allowance from 18% to 14% for Corporation Tax chargeable periods beginning on or after 1 April 2026. A period that straddles the date uses a hybrid rate: 18 × days before the change ÷ days in the period, plus 14 × days on and after it ÷ days in the period, rounded up to the second decimal place (FA 2026 s28). For this company that is 18 × 274/365 plus 14 × 91/365, which is 17.0027%, rounded up to 17.01%. On a main pool of £20,000, the allowance is £3,402, against £3,600 at the old 18% rate and £2,800 at 14%. A company whose accounting period starts on 1 April 2026 or later uses 14% for the whole period.

What is the tax year for individuals?

The tax year for individuals runs from 6 April to the following 5 April and is written as two years: the current tax year is 6 April 2026 to 5 April 2027 (GOV.UK: Income Tax rates and Personal Allowances). It's used for Income Tax, including tax on a director's salary and dividends, and for Self Assessment. Corporation Tax on company profits never uses it.

Section 4 of the Income Tax Act 2007 says a tax year begins on 6 April and ends on the following 5 April, and names it by both years, so "the tax year 2007-08" is the one beginning on 6 April 2007 (ITA 2007 s4). A company meets the tax year through the people it pays. A dividend paid to a director on 30 April 2026 is income of the 2026 to 2027 tax year, taxed at 10.75% in the basic rate band once the director's Personal Allowance and £500 dividend allowance are used (GOV.UK: Tax on dividends: Check if you have to pay tax on dividends). The Self Assessment return and payment for the tax year that ended on 5 April 2026 are both due by 31 January 2027 (GOV.UK: Self Assessment tax returns: Deadlines). The profits paying that dividend were taxed on the company for its own accounting period, which may end in a different tax year altogether, so a director with a 30 June year end is working to three sets of dates at once.

How do you find your company's accounting period?

Find your company's accounting period by starting from the accounts. Take the period of account from Companies House, check it against HMRC's notice to deliver a Company Tax Return (CT603) and your business tax account, then split any period longer than 12 months into two (GOV.UK: Accounting periods for Corporation Tax).

How to find your company's accounting period:

1. Check the "Next accounts made up to" date on Companies House
2. Note the date the company started business, not just incorporation
3. Read the period dates on HMRC's notice to deliver (CT603)
4. Open your business tax account to confirm the dates HMRC holds
5. Count the months from the start date to the accounts date
6. Split any period of account longer than 12 months into two
7. Mark any event that ends a period early, such as ceasing trading

HMRC's system issues the notice to deliver about one month after the end of an accounting period, and the period on it ends on the same date as an accounting period on HMRC's record (COM130130). GOV.UK says HMRC sends a letter with the accounting period dates once the company adds Corporation Tax services to its business tax account, where the dates can also be checked (GOV.UK: Accounting periods for Corporation Tax). A new company's Companies House page says "First accounts made up to" instead. If HMRC's dates don't match the accounts, work from the law: the start follows from when the company began business or its previous period ended (CTA 2009 s9), and the end is the first section 10 event. For accounts shorter than 12 months, GOV.UK says a company filing with software enters the new dates in the software before it files. For accounts longer than 12 months, it says to update the dates with HMRC before the return's original filing date, or risk a late filing penalty.

What happens when the period of account is longer than 12 months?

When a period of account is longer than 12 months, it becomes two Corporation Tax accounting periods: the first 12 months, then the rest. The company files two CT600s from one set of accounts, and each has its own payment date. GOV.UK says the company must file 2 returns because an accounting period can't exceed 12 months (GOV.UK: Accounting periods for Corporation Tax).

The rule comes straight from sections 9 and 10 of the Corporation Tax Act 2009. The first accounting period ends 12 months after it starts, the second begins the next day, and the second ends on the company's accounting date (CTA 2009 s10). An extended period of account from 1 October 2024 to 31 March 2026, the 18-month maximum, becomes one accounting period from 1 October 2024 to 30 September 2025 and a second from 1 October 2025 to 31 March 2026, with Corporation Tax payable on 1 July 2026 and 1 January 2027 respectively (GOV.UK: Pay your Corporation Tax bill: Overview). HMRC's manual says profits of a long period of account are usually apportioned on a time basis, with a transactions basis where that gives a more accurate result (CTM01405). Each of the two accounting periods is then split between financial years in its own right if it crosses 1 April. The date maps, the profit reconciliation and the shared filing deadline are covered in first company accounts and two CT600 returns and in changing your company year end on form AA01.

How does Taxley set your accounting periods and apply the rates?

Taxley (taxley.co.uk), UK online software that prepares and files the Company Tax Return (CT600) with HMRC and the annual accounts with Companies House, starts from your period of account, splits one longer than 12 months into two accounting periods, and applies each financial year's rates.

When you start a return, Taxley looks the company up on Companies House and lists its periods of account, built from the made-up-to dates of accounts already filed and the next accounts due, or you type the dates yourself. A period of account longer than 12 months, up to the 18-month limit, becomes two accounting periods, the first 12 months and the rest, and Taxley prepares both CT600s and sends them together. It won't accept a period longer than 18 months. Each accounting period is cut at 1 April into financial-year slices by days, each with that year's main rate, small profits rate and marginal relief limits, and the CT600's tax calculation lists each financial year. Taxley's capital allowances calculator applies the hybrid main pool rate for a period that straddles 1 April 2026, such as the 17.01% in the 30 June example.

Taxley doesn't file form AA01 or change the accounting period dates HMRC holds, so for accounts longer than 12 months update those with HMRC first (GOV.UK: Accounting periods for Corporation Tax). It splits a long period's income and expenses between the two accounting periods by days (CTA 2009 s52) and doesn't give tax advice. HMRC's manual allows a transactions basis only where it gives a more accurate result (CTM01405), and Taxley doesn't calculate one. Take the 30-second check to see whether Taxley fits your company, or find each accounting period's payment and filing dates with the Corporation Tax deadline calculator.

Frequently asked questions

Is the accounting period the same as the company's year end?

Usually. Once a company is past its first accounts and hasn't changed its year end, its accounting period normally covers the same 12 months as its accounts and ends on the accounting reference date. It differs in the first year, after a year-end change and when trading starts or stops.

Does the Corporation Tax financial year change my filing deadline?

No. Deadlines follow the accounting period, not the financial year. The CT600 is due 12 months after the accounting period ends, and for most small companies the tax is due 9 months and 1 day after it ends, however many financial years the period touches.

Is financial year 2026 the same as the 2026 to 2027 tax year?

No. Corporation Tax financial year 2026 runs from 1 April 2026 to 31 March 2027, while the 2026 to 2027 tax year runs from 6 April 2026 to 5 April 2027. Company profits use financial years; a director's salary and dividends use tax years.

Can an accounting period be shorter than 12 months?

Yes. An accounting period ends early on the company's accounting date, or when it starts or stops trading, so short periods are common in the first and final years and after a company shortens its year end. A short period has its own CT600 and proportionately reduced marginal relief limits.

Do I need two CT600s if my accounting period straddles 1 April?

No. A period that crosses 1 April stays one accounting period with one CT600. Only the profits are split between the two financial years inside the return's tax calculation. Two CT600s are needed when the period of account itself is longer than 12 months.

General information, not personalised tax or accounting advice.