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ACCA Applied Skills · Taxation (UK) · The scope of corporation tax

Delta Ltd, a UK resident company, starts to trade on 1 July 2025 and prepares its first accounts for the 12 months to 30 June 2026. For corporation tax purposes, when does its first accounting period begin?

The first accounting period begins on 1 July 2025, when the company starts to trade. An accounting period starts when a company first becomes liable to corporation tax, for example by commencing a trade, not at the start of a financial year or tax year.

  1. A1 April 2025, the start of the financial year
  2. B1 July 2025, when it begins to tradeCorrect
  3. CThe date of incorporation, regardless of trading
  4. D1 January 2026, the start of the tax year

Explanation

A company's first accounting period begins when it starts to trade or otherwise becomes liable to corporation tax, such as on acquiring income. Here the company starts trading on 1 July 2025, so this is the start. Financial year or tax year dates are irrelevant to when a period begins.

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