Your First Year of Company Accounts

The first year of running a limited company is exciting, but it also comes with a set of legal duties that catch many new directors off guard. Once your company is registered, you become responsible for keeping proper records and for filing accounts and returns with both Companies House and HMRC. The good news is that almost all of this is predictable: the deadlines are fixed, the documents are standardised, and getting your systems right early makes everything that follows far simpler. This guide walks you through what to do, and when, in your company’s first twelve months and beyond.

Setting Up After Incorporation

When you incorporate, Companies House issues a certificate of incorporation with your company number and registration date. Shortly afterwards, HMRC will write to your registered office with the information you need to register for Corporation Tax. You must do this within three months of starting to trade.

Your early housekeeping tasks include:

• Confirming your registered office address and the directors’ details on the public register
• Registering for Corporation Tax with HMRC
• Deciding whether you need to register for VAT and PAYE (see when to register below)
• Keeping your incorporation documents, share certificates and any shareholders’ agreement safe

If you are unsure how the company form differs from working for yourself, our guide on moving from sole trader to limited company explains the key changes.

Your Accounting Reference Date

Every company has an accounting reference date (ARD), which marks the end of its financial year. By default, Companies House sets your first ARD to the last day of the month in which you incorporated, one year later. So a company formed on 12 March would have a first ARD of 31 March the following year.

Because of this, your first accounting period is often slightly longer than twelve months. This is normal. You can change your ARD if it suits your business, for example to align with a quieter trading period, but keep it consistent once chosen. The ARD drives most of your other deadlines, so note it carefully.

Opening a Business Bank Account

A limited company is a separate legal entity, so its money is not your money. Open a dedicated business bank account as soon as practical and run all company income and expenses through it. Mixing personal and company funds creates confusion, complicates your records and can blur the boundaries that protect you as a director.

Keeping company finances separate also makes it far easier to track what you have drawn out, whether as salary or dividends. Our guide on salary versus dividends covers how to pay yourself correctly.

Bookkeeping From Day One

Good bookkeeping is the foundation of every filing you will make. From your very first transaction, record:

• All sales and income, with invoices issued
• All purchases and expenses, with receipts kept
• Bank statements and reconciliations
• Details of any money paid to or borrowed from directors

You must keep these records for at least six years from the end of the accounting period. Digital tools make this straightforward and keep you ready for Making Tax Digital. If you are weighing up your options, see our advice on choosing accounting software and on allowable business expenses so nothing is missed.

Your First Confirmation Statement

The confirmation statement is a simple annual return to Companies House that confirms your registered details are correct, including directors, shareholders, share capital and your people with significant control (PSC). It is not an accounts filing and carries no financial information.

Your first confirmation statement is due a year after incorporation, and you have a short window to file it. There is a modest fee, and filing online is quickest. Even if nothing has changed, you must still confirm the record is accurate.

Your First Statutory Accounts

Your first statutory accounts report your company’s financial position to Companies House and form the basis of your tax return. Most new companies qualify as small or micro-entities and can prepare simpler accounts under UK GAAP, typically FRS 105 for micro-entities or FRS 102 (Section 1A) for small companies.

Small and micro-entity accounts usually include a balance sheet and limited notes, with reduced disclosure. The right regime depends on your size, so it is worth reading our overview of micro-entity versus small company accounts before you start. For the wider process, our year-end and annual accounts hub brings the steps together.

Your First Corporation Tax Return

You report your profits to HMRC on a Company Tax Return (CT600) and pay Corporation Tax at the applicable rate. A quirk of the first year is that your long first accounting period may need to be split into two Corporation Tax periods, because a Corporation Tax period cannot exceed twelve months. You file a return for each, even though Companies House treats it as a single set of accounts.

Importantly, the payment deadline comes before the filing deadline: Corporation Tax is generally due nine months and one day after the end of your accounting period, while the return itself is due twelve months after. Set money aside as you trade so the bill is not a shock; our note on setting aside money for tax explains a sensible approach.

Key Deadlines to Diarise

The table below summarises the headline obligations. Exact dates depend on your incorporation date and ARD, so check your own letters from HMRC and Companies House.

Miss a Companies House accounts deadline and automatic late filing penalties apply, increasing the longer you delay. HMRC also charges penalties for late returns and interest on late tax, so diarise everything early.

Related

• Limited company finances hub
• Year-end and annual accounts hub
• Company operations guides
• Choosing accounting software