Registering a new company for corporation tax

A new company is not automatically active for corporation tax. Its first accounting period starts when it comes within the charge, which for most companies is the day it starts to do business, and section 55 of the Finance Act 2004 requires it to tell HMRC within three months of that date. Shortly after incorporation HMRC sends a CT41G letter with the company’s ten digit Unique Taxpayer Reference, and once the company is set up online it receives an activation code, its accounting period dates and, later, a notice to deliver a return.

When does a new company come within the charge to corporation tax?

Under section 9 of the Corporation Tax Act 2009 an accounting period begins when a company comes within the charge to corporation tax. Section 9(2) adds that a UK resident company is treated as coming within the charge when it starts to carry on business, if it would not otherwise be within it. Incorporation alone does not start the clock.

GOV.UK describes doing business broadly: buying, selling, advertising, renting a property and employing someone all count. Its dormant company guidance adds getting interest. Until something like that happens, a newly formed company is usually dormant for corporation tax, which is a separate test from dormancy for Companies House purposes (see dormant company accounts).

Two special cases appear in HMRC’s Company Taxation Manual. A holding company whose only income is dividends starts business, and its first accounting period, when it first holds shares in a non dormant company (CTM01420). And if a chargeable gain or allowable loss accrues before the company is otherwise within the charge, section 9(3) starts an accounting period at that moment.

What does the three month rule require?

Section 55 of the Finance Act 2004 requires a company to give HMRC notice of the beginning of its first accounting period, and of any later accounting period that does not immediately follow a previous one, such as a restart after dormancy. The notice must be in writing, state when the accounting period began, include prescribed information, and be given not later than three months after the period began.

HMRC’s COTAX Manual at COM40030 lists the prescribed information under the Corporation Tax (Notice of Coming within Charge Information) Regulations 2004:

• the company’s name and registration number;
• the address of its principal place of business;
• the date to which it intends to prepare accounts;
• details of any business it has taken over and the person it acquired it from;
• the name and address of any parent company.

Section 55 applies to bodies corporate, not to unincorporated associations or partnerships, and a company with a reasonable excuse is not treated as failing if it gives notice without unreasonable delay once the excuse ends (section 55(4)).

What does HMRC send after incorporation?

COM40070 explains the mechanics. When Companies House accepts an incorporation, the details pass electronically to HMRC and a corporation tax record is set up automatically. Where that works, form CT41G is issued automatically the next day. The CT41G gives the company its Unique Taxpayer Reference and explains how to supply the section 55 information, preferably online, if it was not given at registration (COM40030). Cases with problems, such as an overlong name or address, go to a manual work list and the CT41G is delayed until a caseworker issues it.

All post goes to the registered office, so GOV.UK advises checking that address on the register before setting up corporation tax. If no UTR has arrived 15 working days after registration, a copy can be requested online.

How is corporation tax set up online?

GOV.UK says that when a company is registered using the Companies House online service it will usually be set up for corporation tax at the same time, unless it is dormant. That service can also register the company for PAYE (see registering as an employer). Companies formed by post, through an agent, with third party software, or online without activating a business tax account must add corporation tax services to their business tax account themselves, which GOV.UK says should happen when the company starts to do business. They need:

• the company registration number;
• the date the company started to do business, which becomes the start of its first accounting period;
• the date its first accounts are made up to;
• the ten digit UTR.

HMRC then posts an activation code within 10 days (21 days for someone abroad), instructions for activating the service and the payment deadline. GOV.UK says a letter giving the dates of the first accounting period follows, and that the company should contact HMRC if it thinks the dates are wrong. Later HMRC issues a notice to deliver a Company Tax Return, which creates the legal duty to file; see the CT600 explained.

How is this different from notifying chargeability?

There is a second, older duty. Paragraph 2 of Schedule 18 to the Finance Act 1998 requires a company that is chargeable to tax for an accounting period and has not received a notice to file to tell HMRC within twelve months from the end of that period. That obligation is listed in paragraph 1 of Schedule 41 to the Finance Act 2008, so a failure to notify penalty can follow if it is missed; see failure to notify penalties. In practice, giving the section 55 information promptly means HMRC knows about the company and issues the notice, so the later duty rarely bites.

What if the company is dormant before it starts trading?

GOV.UK’s guidance on first accounts and returns sets out two outcomes, using a company formed on 11 May 2024 that starts trading on 22 July 2024 with an accounting reference date of 31 May 2025:

• If corporation tax services were added before the accounting reference date, the company usually files no return for the dormant weeks and one return for 22 July 2024 to 31 May 2025.
• If they were not added before that date, it must file two returns: one for the dormant period from 11 May to 21 July 2024 and one for the trading period.

Either way the company prepares one set of accounts from incorporation to 31 May 2025. The relationship between the accounts period and tax periods is covered in accounting periods vs periods of account.

How might the dates work for a new company?

Illustration only. Hollins Design Ltd is incorporated on 3 March 2026 and does nothing until it signs its first client and opens for business on 15 June 2026.

Event	Date
Incorporation; CT41G with UTR issued shortly after	3 March 2026 onwards
Starts to do business; first accounting period begins	15 June 2026
Section 55 notice due (three months)	By mid September 2026
Accounting reference date (last day of the anniversary month)	31 March 2027
First accounting period ends	31 March 2027
Corporation tax payable (nine months and one day)	1 January 2028
Company Tax Return due (12 months)	31 March 2028

Assuming the company adds corporation tax services promptly, it files no return for the dormant months, and because the trading period is under 12 months there is only one accounting period. Had the company traded from incorporation, its accounts to 31 March 2027 would have exceeded 12 months and produced two; see long first accounts.

What are the common mistakes?

• Assuming that registering at Companies House completes the job, and never adding corporation tax services or giving the trading start date.
• Losing the CT41G and not knowing the UTR when the first return falls due.
• Leaving a formation agent’s address as the registered office, so HMRC letters go astray.
• Treating the company as dormant while it is advertising, renting out property or earning interest.
• Restarting a dormant company without telling HMRC, which section 55(1)(b) requires within three months.
• Thinking no return is needed because there is no profit; GOV.UK says a return must be filed even if the company makes a loss.

For the wider picture of how the tax works once the company is set up, see corporation tax explained and corporation tax deadlines.

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Related Accountapedia entries

• Your company’s first corporation tax return
• Registering a new business: which taxes
• Registering for Self Assessment and getting a UTR
• Non resident companies with UK rental income
• When is corporation tax due
• Registering a charge over property a company acquires

Sources

• legislation.gov.uk: Act 2009 c. 4, section 9
• GOV.UK: Add corporation tax services to business tax account
• GOV.UK: Dormant for corporation tax
• GOV.UK: Manual page CTM01420
• legislation.gov.uk: Act 2004 c. 12, section 55
• GOV.UK: Manual page COM40030
• GOV.UK: Manual page COM40070
• GOV.UK: Register your company
• GOV.UK: Corporation tax accounting period
• legislation.gov.uk: Act 1998 c. 36, schedule 18

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.