Commentary

D1.108 Corporation tax—accounting periods

Corporate tax
Corporate tax | Commentary

D1.108 Corporation tax—accounting periods

Corporate tax | Commentary

D1.108 Corporation tax—accounting periods

In the majority of cases an accounting period for corporation tax purposes will coincide with the company's own period of account. (The situation which arises when an accounting period does not coincide with a period of account is dealt with at D1.309).

In this context, the term 'accounting date'1 means the date to which a company makes up its accounts and 'period of account' means the period for which it does so2. 'Accounting period'3 is a term which indicates the period by reference to which corporation tax is chargeable. It is not expressly defined, instead the legislation prescribes the circumstances which will begin and end an accounting period.

An accounting period of a company commences whenever any of the following events occur4:

  1.  

    •     immediately after the end of the previous accounting period of the company, if the company is still within the charge to corporation tax

  2.  

    •     the company comes within the charge to corporation tax; for these purposes a UK resident company comes within the charge to corporation tax when it starts to carry on business, if it would not otherwise be within the charge to corporation tax5

  3.  

    •     a chargeable gain or an allowable loss accrues to the company at a time which is not otherwise in an accounting period

  4.  

    •     in the case of a company being wound up, when the winding up starts. Subsequently after the winding up starts, a new accounting period begins immediately after the end of the previous accounting period if

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