All new companies receive a pack of forms and notes from HMRC shortly after they incorporate.

The forms are:

• Corporation Tax – Dormant Company (CT41G insert).
• Corporation Tax – New Company Details (CT41G).
• Authorising Your Agent (64-8).

If your Company is not going to commence business within a few weeks of receiving the Introductory Pack then complete and return this form.

You should retain the form ‘Corporation Tax New Company Details (CT41G)’ because:

• you will need to send it to HMRC as soon as the company commences business; and
• it has the company’s unique taxpayer reference and the address of the HMRC office that deals with the company’s corporation tax affairs printed on it.

You do not have to complete this form if you don’t want to. However if an agent, such as an accountant, looks after your tax affairs then it may be a good idea to fill in this form – it gives HMRC permission to talk to your agent about your company’s tax affairs.

The company’s first accounting period will begin when the Company commences business (eg when it opens its doors for trade). This is the date on which the company has the potential to bring in income, rather than the date of its incorporation. In other words, it is the date on which the company acquires a source of income.

Companies formed abroad are deemed to start an accounting period for tax purposes when they become resident in the UK.

This question, which is asked by the ‘Corporation Tax – New Company Details (CT41G)’ form, often causes confusion. The form is asking for the last day of the first accounting period of the company.

Companies draw up accounts for each accounting period. Each accounting period lasts for a maximum of twelve months.

The key point to consider here is that the company is obliged to draw up accounts for both Companies House and HMRC. HMRC require accounts drawn up to the last day of the company’s accounting period. Companies House require accounts to be drawn up to within seven days of the company’s Accounting Reference Date.

In order to save a great deal of time the company should ensure that its accounting period ends on the same day (or within seven days) as its Accounting Reference Date. Otherwise it will need to draw up two different sets of accounts for each period – one for HMRC and one for Companies House.

When a company is incorporated Companies House sets its Accounting Reference Date to the last day of the month of incorporation. For example, if a company was incorporated on 5th January 2022 its Accounting Reference Date would be 31st January 2023. Accounts would need to be drawn up to a date within seven days of 31st January 2023 and filed with Companies House.

The ‘Corporation Tax New Company Details (CT41G)’ form asks you to state when the company’s first accounting period started – this is the day on which the company commenced business (see question above).

It also asks you to specify the date to which the company intends to prepare its accounts’. This is the end of the company’s first accounting period, which can be no more than 12 months after the accounting period started. When selecting a date make sure you know when the company’s Accounting Reference Date is.

In order to align the Accounting Reference Date with the end of the accounting period customers usually: (a) state that the company intends to draw up its accounts to a date which is 12 months after the start of the company’s accounting period (eg 1 February 2022 to 31 January 2023); and then (b) file a form with Companies House to change their Accounting Reference Date to that date.

However, please note that the company’s first Accounting Reference Date at Companies House cannot be changed to a date that is more than 18 months after the company was incorporated, and that a company’s Accounting Reference Date cannot be changed after the deadline for the company filing its accounts has passed.

The ‘Corporation Tax – Dormant Company (CT41G insert)’ form refers to a ‘shelf company’. This is a company which has been formed for the express purpose of being sold. Shelf companies are dormant – they do not trade, own assets or carry out activities. Shelf companies literally sit on a shelf until they are sold.