Your first Corporation Tax bill is usually due nine months and one day after the end of your company’s accounting period, while the Company Tax Return is normally due 12 months after the period ends. The dates are different, and that catches many new directors out. The simplest way to prepare is to keep your bookkeeping current, estimate tax from the start and reserve cash before the payment deadline approaches.
Corporation Tax is paid by the company, not by you personally. It is based on taxable profit, which can differ from the profit shown in your accounts. That means good records, a realistic review and early planning matter more than trying to work it out in the final week.
First, understand your company’s key deadlines
Your company has separate obligations to HMRC and Companies House. The precise dates depend on your accounting period and company history, so always check your own notices and online accounts. For many companies, the following is the core timetable.
| Task | Usual deadline | Why it matters |
|---|---|---|
| Pay Corporation Tax | 9 months and 1 day after the end of the accounting period | This is often earlier than the tax-return deadline, so cash needs to be ready first. |
| File Company Tax Return | 12 months after the end of the accounting period | The return calculates taxable profit and the Corporation Tax liability. |
| File statutory accounts | Depends on the company’s status and accounting reference date | Accounts go to Companies House and are also used as part of the company tax filing process. |
| File confirmation statement | Usually each year, by the company’s own due date | This confirms key company information held by Companies House. |
HMRC’s Company Tax Return guidance confirms the usual 12-month filing deadline and the separate nine-month-and-one-day payment deadline. GOV.UK also explains what statutory accounts for a private limited company must contain.
Your first year can be unusual. A company’s first statutory accounts may cover more than 12 months, but a Corporation Tax accounting period cannot normally exceed 12 months. That can mean more than one Corporation Tax period and more than one return calculation. It is worth confirming the dates early rather than assuming the Companies House accounts period and HMRC period will always be identical.
Why your first bill can be difficult to predict
New companies often start with incomplete records. A director may pay early costs personally, use the company card for a mixture of things, or wait until the first year-end to set up proper bookkeeping. Those habits make it harder to see the real taxable profit.
Your Corporation Tax figure can also differ from the profit visible in the accounts. Some costs are treated differently for tax, capital items may qualify for allowances rather than an immediate deduction, and director transactions may need adjusting. The key is not to guess the final bill from the bank balance.
How to build a Corporation Tax reserve
Start reserving tax as soon as the company begins making profit. The exact percentage depends on your business and current tax rules, but setting money aside regularly is much easier than finding a large sum after year end.
- Keep records current. Reconcile the company bank account and enter invoices, bills and receipts every month.
- Review profit regularly. Look at income less genuine business costs, then allow for tax and other liabilities.
- Separate the cash. Consider moving a tax provision into a dedicated savings pot so it is not accidentally spent on day-to-day costs.
- Include VAT and payroll. Corporation Tax is not the only future payment. Your reserve needs to sit alongside VAT, PAYE, supplier bills and working capital.
- Update the forecast. A new contract, a large purchase or a fall in sales can change what the company can safely distribute.
This is not about locking money away unnecessarily. It is about knowing what part of the bank balance is already committed so you can make better decisions about drawings, investment and growth.
What information your accountant will need
A well-prepared year-end is quicker, easier to review and more useful. Aim to have the following ready soon after the accounting period ends:
- Bank and card records. Every account used by the company, including payment providers and savings accounts.
- Sales information. Invoices, cash sales, online-platform reports, credit notes and amounts owed by customers.
- Purchase evidence. Supplier invoices, receipts, finance agreements and details of business costs paid personally then reimbursed.
- Payroll and pension records. PAYE reports, pension contributions and any benefits or expenses provided to directors or staff.
- Asset purchases. Details of computers, tools, furniture, vehicles and other equipment bought or sold in the period.
- Director transactions. Salary, dividends, expense claims, money lent to the company and money withdrawn personally.
Do not worry if something is missing. Identify it early and explain the position. Guessing or posting an unexplained balance to “miscellaneous” creates more work later.
Do not confuse Corporation Tax with your personal tax
The company pays Corporation Tax on its taxable profit. You may separately pay Income Tax on salary, dividends, benefits or other income. These are connected when planning cash flow, but they are not the same bill.
For example, a company might have enough profit to pay Corporation Tax but a director may still need to plan for personal Self Assessment on dividends. Conversely, a personal tax bill should not simply be paid from the company account without recording the transaction correctly.
Our guides to director dividend tax and HMRC payments on account explain two of the personal tax issues that commonly sit alongside a company year end.
Helpful first-year habits
New directors do not need to become tax experts, but a few habits make a major difference.
- Use one company bank account. Keep company income and spending separate from personal money.
- Save receipts as you go. Digital capture is far better than relying on a box of paper at year end.
- Label unusual payments. A short note for travel, equipment, personal reimbursement or director withdrawals can prevent later confusion.
- Check the bookkeeping monthly. A short review keeps errors small and makes the numbers useful.
- Ask before major changes. Buying a vehicle, taking a large dividend, employing someone or signing a long lease can have tax and cash-flow consequences.
Cloud bookkeeping makes this routine easier, especially when you want an accountant to review the same live records. You can explore our bookkeeping and Xero support if you want a simpler way to keep the records on track.
Prepare your first company tax bill with confidence
SB Business Consulting helps limited company directors stay on top of accounts, Corporation Tax and year-end planning. I work with businesses in Cheltenham and throughout Gloucestershire, as well as clients nationwide. See our limited company accounts service, read about claiming company expenses, or get in touch before your first year end.
This article is general guidance only. Corporation Tax deadlines and calculations can vary, particularly for long accounting periods and larger companies. Check your company’s dates and take tailored advice before acting.
Leave a Reply