If you’re in your first year of trading as a limited company, you may notice something odd: your first financial year is usually longer than 12 months. This often surprises new directors, but it’s completely normal - and nothing to worry about.
Why Your First Year Is Longer
When you register a company, Companies House automatically sets your first year‑end to the last day of the month, one year after incorporation.
For example: If you set up your company on 15 January 2026, your first year‑end will default to 31 January 2027.
Unless you incorporate on the first day of a month, your first financial year will always be 12 months plus a few extra days.
Companies House is perfectly happy with this - you can file accounts for that full period without any issues.
The HMRC Complication: Corporation Tax Returns
HMRC’s systems work differently. They only allow Corporation Tax returns to cover a maximum of 12 months. This means your first set of accounts must be split into two returns:
- A full 12‑month return.
- A short return (for the remaining days).
This split is purely administrative. It does not change the amount of tax you pay - the calculation is still based on your total profit for the full period. It simply means you’ll need to review and approve two returns for your first year.
What Happens in Future Years?
The “two‑return” situation only happens once, right at the start. Following the first year, your financial period will run for a standard 12 months.
Your Corporation Tax return will also match that period. As a result, you’ll only need to file one return each year.
