How your figures are shared between two Corporation Tax returns
Short version. For a long period requiring two CT600s, the service divides ordinary full-period income and running costs by days. Claims and events with allocation panels follow the split you confirm. Enter the accounts totals once and review the two dated computations.
Go to the steps and entry details
On this page
1. Why there are two returns
A single Corporation Tax return can only cover up to 12 months, so a first year of, say, 12 months and 3 weeks files as one return for the first 12 months and a second return for the remaining days. Companies House still receives a single set of accounts covering the whole period. The full story is in Your first year: filing when your accounting period is over 12 months.
2. How the sharing works
You enter one set of figures for the whole period, and we divide each total between the two returns in proportion to their length in days. We do not ask for the date of each transaction, so the split follows the calendar rather than your bank statement.
For example, a first year of 387 days splits into a 365-day return and a 22-day return. A £150 software cost paid during the year is then shared like this:
| Days | Share of the £150 cost | |
|---|---|---|
| Return 1 | 365 | £141 |
| Return 2 | 22 | £9 |
| Total | 387 | £150 |
This is not a shortcut of ours. For a long period of accounts, HMRC’s normal approach is to apportion the overall profit or loss between the Corporation Tax periods on a time basis. HMRC sets this out in its Company Taxation Manual at CTM01405. Other approaches are recognised where time apportionment would give an unfair result, so placing each amount by its transaction date is also acceptable. Day count is the standard method, and it is the one we apply.
3. Why the tax result is usually the same
For most companies the choice of method changes nothing except which return shows the amounts. In the example above, suppose the £150 cost is the company’s only entry and there is no income. Day count gives Return 1 a £141 loss and Return 2 a £9 loss. Placing by transaction date gives Return 1 nothing and Return 2 a £150 loss. Either way:
- neither return has any Corporation Tax to pay, and
- the loss available to carry forward is £150, because the two returns are consecutive accounting periods of the same company and a loss in the first carries into the second automatically.
The two returns always add back up to your full-period totals, so nothing is taxed twice and nothing is lost. The split can matter where one return would show a taxable profit while the other shows a loss. If your figures look like that and you are unsure, contact us before you file.
4. Capital allowances are different
The ordinary day split does not replace the allocation controls for donations, dividends received, gains, current capital losses or qualifying pre-trading expenditure. Capital claims and additions also use their applicable allocation panel. The allocation checklistlinks to each entry guide. Use the dates and amounts you have prepared and check both returns.
Day counting is the wrong way to place a capital allowance, because an allowance belongs to the return covering the day you bought the asset. Use the applicable allocation panel and see capital allowances in a long first year.
5. If the day-count split does not suit your figures
Day count is HMRC’s normal approach and the tax result is usually the same either way, as section 4 shows. Two situations are worth treating differently.
Capital allowances and balancing charges. These are not shared by day count. We show both return date ranges and ask you to assign each purchase or sale to the return whose dates cover it, so an asset bought in month two belongs entirely to the first return. That is handled inside the one filing, so there is nothing separate to do.
The company was dormant at first. If it was dormant at the start of the accounts period and started trading later, in a first year or a later one, check your CT603 notice. Where HMRC records show Corporation Tax starting at the trading date, it expects one return rather than two and there is nothing to split. Read dormant at first, then trading instead, and use the separate Corporation Tax period option in the wizard.
If neither of those describes your position and you still want each amount placed by its transaction date, contact us before you file and we will go through the options with you. Please do not file the same accounting period twice trying to achieve it, because HMRC would then receive duplicate returns for the same period.
6. Does time apportionment apply to an unincorporated club?
Yes, the ordinary Corporation Tax period rules also cover an unincorporated members club within the charge to Corporation Tax. HMRC’s tax definition of a company includes unincorporated associations. See CTM00510. Accounts covering 18 months of continuous Corporation Tax activity normally need two CT600 returns, because a tax accounting period cannot exceed 12 months. See CTM01510.
For ordinary trading profits, time apportionment is the usual approach described in CTM01405 above. For example, 1 April 2024 to 30 September 2025 contains 548 days. A £54,800 recurring income total divides into £36,500 for the first 365 days and £18,300 for the remaining 183 days. Separate rules can determine the period for a relief or event, so this is not a rule to divide every return box by days.
This section explains ordinary taxable club returns. It does not determine a CASC’s exemption claim or its CT600E disclosures. When the club option is available, follow the club filing guide for ordinary clubs and full, partial or no-claim CASC returns.
This article is general guidance, not tax advice. If your situation involves more than a straightforward split, for example significant profits in one part of the year, speak to an accountant or contact us before filing.