Changing Your Company's Accounting Period: How It Affects Your CT600
Thinking about changing your company's year-end date? Maybe your accountant suggested it, or you want to align with the tax year. Whatever the reason, changing your accounting period has significant implications for your CT600.
Here's what you need to know before making the change.
Why Companies Change Their Accounting Period
Common reasons include:
- Aligning with the tax year (ending 31 March) to simplify corporation tax calculations
- Matching a parent company's year-end for group reporting
- Cash flow management — shifting the payment date for corporation tax
- Seasonal businesses — ending the year after peak season when cash is highest
- New ownership — the buyer wants a different reporting period
How to Change Your Accounting Period
You change your accounting period by filing a Change of Accounting Reference Date (ARD) with Companies House. This is done via form AA01.
The rules
- You can shorten your accounting period at any time
- You can extend your accounting period, but:
- Not beyond 18 months from the start of the period
- Only once every 5 years (with exceptions)
- The extension must be filed before the current deadline
Exceptions to the 5-year rule
You can extend more than once in 5 years if:
- The company is in administration
- HMRC has given special permission
- The company is aligning with an EU parent company year-end
How It Affects Your CT600
This is where it gets important. HMRC has its own rules about accounting periods for corporation tax, and they're different from Companies House rules.
HMRC's key rule: Maximum 12 months
For corporation tax purposes, an accounting period cannot exceed 12 months. If your Companies House accounting period is longer than 12 months (which happens when you extend your year-end), you'll need to file two CT600 returns:
Example: Extending from 12 to 18 months
Say your company normally has a year-end of 31 December, and you extend to 30 June the following year:
- Companies House period: 1 January 2025 → 30 June 2026 (18 months)
- CT600 #1: 1 January 2025 → 31 December 2025 (12 months)
- CT600 #2: 1 January 2026 → 30 June 2026 (6 months)
You file two CT600 returns, each covering up to 12 months.
Shortening your period
If you shorten your period (e.g., from 12 months to 9 months), you only need one CT600 for the shorter period. The next CT600 then picks up from where the short period ended.
Example: Shortening to align with 31 March
- Old year-end: 30 September 2025
- New year-end: 31 March 2025
- Short CT600: 1 October 2024 → 31 March 2025 (6 months)
- Next CT600: 1 April 2025 → 31 March 2026 (12 months, new cycle)
The Tax Implications
Changing your accounting period doesn't just affect paperwork — it can change how much tax you pay.
Split-year tax rates
If your accounting period straddles two financial years with different tax rates, your profits are split proportionally. Changing your year-end could move more or less profit into a higher or lower rate year.
Current corporation tax rates:
- 19% on profits up to £50,000 (small profits rate)
- 25% on profits over £250,000 (main rate)
- Marginal relief between £50,000 and £250,000
Capital allowances
Annual Investment Allowance (AIA) and other capital allowances are time-apportioned for short or long periods. A 6-month period gets only half the annual AIA limit.
Example:
- 12-month period: AIA = £1,000,000
- 6-month period: AIA = £500,000
- 18-month period: Two CT600s — first gets £1,000,000, second gets AIA for its length
Loss relief
If the change creates a short period with a loss, you can still carry back or carry forward that loss. But the mechanics of loss relief work per accounting period, so a short period with a small loss might be less useful than a full year.
Payment dates
Corporation tax is due 9 months and 1 day after the end of each accounting period. Changing your year-end changes when you need to pay.
Impact of extending: If you extend your year-end by 6 months, you'll have two CT600s with two payment dates — and the first one might come due sooner than you expect.
Filing Deadlines After a Change
Companies House
- Annual accounts are due 9 months after the new year-end (private companies)
- If you've extended, the deadline is calculated from the new end date
- But it can't be later than the original filing deadline
HMRC
- CT600 is due 12 months after the end of each accounting period
- For extended periods (two CT600s), each has its own 12-month deadline
- The first CT600's deadline might be earlier than you think
Example: 18-month extension
- Extended period: 1 Jan 2025 → 30 Jun 2026
- CT600 #1 (Jan-Dec 2025): Due 31 December 2026
- CT600 #2 (Jan-Jun 2026): Due 30 June 2027
Common Mistakes When Changing Periods
1. Forgetting to file two CT600s
The most common error. If your Companies House period exceeds 12 months, you must file two CT600 returns. Missing the second one triggers late filing penalties.
2. Missing the shortened deadline
When you shorten your period, the filing deadline for the short return might be sooner than expected. HMRC calculates it from the new period end, not the old one.
3. Not telling HMRC
Companies House and HMRC don't always sync automatically. If you change your ARD at Companies House, inform HMRC separately to avoid confusion.
4. Getting the profit split wrong
When filing two CT600s for an extended period, you need to apportion your profits correctly between the two periods. This isn't always a simple time split — some income and expenses relate to specific dates.
5. Forgetting to time-apportion allowances
AIA, annual exemption, and small profits thresholds are all time-apportioned for periods shorter or longer than 12 months.
Step-by-Step: What to Do
- Decide your new year-end date
- File AA01 with Companies House (online or by post)
- Notify HMRC — call 0300 200 3410 or write to them
- Calculate whether you need one or two CT600 returns
- Prepare your accounts for the new period(s)
- File your CT600(s) before the respective deadlines
- Pay corporation tax by 9 months and 1 day after each period end
When Should You NOT Change Your Period?
Think twice if:
- You're close to a filing deadline — the change might shorten it
- You'd create a very short period that wastes capital allowances
- Your company has losses that would be better offset in a longer period
- You've already extended in the last 5 years
- The change would push more profit into a higher tax rate band
Frequently Asked Questions
Can I change my year-end after the period has ended?
You can shorten a period after it's ended. You can only extend a period while it's still current (before the deadline).
Does changing my year-end affect my VAT period?
No. Your VAT periods are separate from your corporation tax accounting periods. Changing your CT year-end doesn't affect VAT returns.
What if my first company year-end was automatically 18 months?
New companies often have a first period longer than 12 months (from incorporation to the first ARD). This automatically requires two CT600 returns. Many first-time directors miss this.
Can Taxpipe handle period changes?
Yes. When you set up your filing on Taxpipe, you enter the exact start and end dates of your accounting period. We handle the calculations, time-apportionment, and HMRC submission for each period separately — all for £59 per CT600.
Need to file a CT600 for a changed accounting period? Start your filing with Taxpipe — we handle split periods, time-apportionment, and all the complications. Just £59 per return.