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

Zeta Ltd, a UK resident company, prepares its first set of accounts for the 15 months from 1 January 2025 to 31 March 2026. How many chargeable accounting periods does this give rise to for corporation tax purposes?

Two chargeable accounting periods arise: the first 12 months to 31 December 2025 and then the remaining 3 months to 31 March 2026. A chargeable accounting period can never exceed 12 months, and the long period is split with the 12-month period first.

  1. AOne period of 15 months
  2. BTwo periods: 12 months to 31 December 2025 and 3 months to 31 March 2026Correct
  3. CTwo periods: 3 months to 31 March 2025 and 12 months to 31 March 2026
  4. DThree periods of 5 months each

Explanation

A chargeable accounting period cannot exceed 12 months. A 15-month period of account is split into a first period of 12 months (1 January to 31 December 2025) and a second period of the remaining 3 months to 31 March 2026. The option with 3 months first is wrong because the 12-month period is always the first.

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