COM1001 - Accounting periods: company accounting periods: introduction

A company resident in the United Kingdom is chargeable to CT on all its profits wherever the profits arise, whether or not the profits are received in or transmitted to the United Kingdom.

The charge to CT is made on the profits arising in an AP.

An AP begins when a company first comes within the charge to CT. After that, as long as the company remains within the charge to CT, a new AP begins whenever an AP ends. An AP ends when one of several possible events occurs. For more information see the Company Taxation Manual (CTM) at CTM01500.

COTAX creates AP records automatically in the following situations.

• A new case is set up.
• It issues a notice to deliver.
• Whenever possible when a company or agent has changed the existing AP structure when submitting a return through the CT Online Service.
• You log a return reflecting an AP not shown on COTAX.

You need to intervene as required to:

• correct APs that have been set up automatically. See COM132054 for more information
• deal with cases referred to you for review, where COTAX is unable to automatically amend the AP record
• prevent the future automatic creation of 12 monthly AP records when exceptionally, you know in advance that an AP will not last 12 months or APs are regularly less than 12 months.

Non resident companies set up on COTAX following the disposal of an interest in UK land or property

These companies are set up manually in COTAX and will generally have a single day AP (the date of the disposal) followed by a period of dormancy. If there is more than one disposal or the company expects to dispose of more than one interest they will usually have a common 12 month AP.

COTAX displays on the company’s AP record periods for which a company is dormant. However, an AP ends but can never begin when a company ceases to be within the charge to CT, so a period of dormancy is not an AP.

See COM1040 for more information on dormant periods.