Once you incorporate a limited company, your company becomes a separate legal entity. Its money, assets, debts and transactions need to be recorded separately from your personal finances — and a set of Companies House and HMRC obligations begins that did not apply in the same way before.

First-year accounts for new directors are often more complicated than later years. Your first statutory accounting period may be longer than 12 months, which can mean two Corporation Tax returns rather than one. Different filing deadlines run from different dates. VAT and payroll can create obligations mid-year, well before your annual accounts are due.

This post covers what to keep, what to file, when deadlines fall, and what tends to go wrong when directors assume the first year works the same way as every year after it.

A limited company is legally separate from you as its director. That changes how you handle bookkeeping, expenses, tax, and any money moving between you and the business.

Your statutory accounts show the company's financial position and performance and are filed with Companies House. Your Company Tax Return is sent to HMRC and used to calculate your Corporation Tax position. The information overlaps, but the filings are separate and their deadlines differ. New directors regularly treat them as the same thing; they are not.

A company that issued only a few invoices or incurred a handful of costs is different from a company that is genuinely dormant. Low activity does not remove your obligation to prepare the appropriate annual accounts. If your company is dormant and HMRC has accepted that position, a Company Tax Return will not normally be required — unless HMRC sends a notice to file one. But a dormant company still needs to file dormant accounts with Companies House and submit a confirmation statement.

Using a dedicated business bank account makes the audit trail much cleaner. If you pay a company expense personally, record it properly. If the company pays something personal for you, that should go through your director's loan account rather than being treated as a business expense.

Your first accounts are only as reliable as the records behind them. Rebuilding 12 months of transactions from bank statements and emails immediately before a filing deadline creates unnecessary work and increases the risk of missing something. Keeping records continuously throughout the year is the practical answer.

You should normally retain records covering:

• Sales invoices and other income
• Supplier invoices and receipts
Business bank and credit-card statements
• Expense claims
• Contracts and supporting documents
• Cash transactions
• Refunds and credit notes
• Payroll records
• VAT records where relevant
• Loans and finance agreements

HMRC's guidance on company and accounting records also requires records of money received and spent, company assets, debts owed and amounts owed to the company.

Laptops, machinery and other longer-term purchases should be identified separately from routine day-to-day costs. If you hold stock, you may also need year-end stock records. For Corporation Tax purposes, company records generally need to be kept for six years from the end of the financial year they relate to. Digital record-keeping makes this considerably easier than relying on paper receipts or individual email inboxes.

Not every transfer between you and the company means the same thing. Money you put in may be share capital or a director's loan. Money you take out might be salary, repayment of expenses, dividends or a director's loan. Transferring £1,000 from the company account to yourself does not automatically make it a dividend — you need to know why the payment was made and record it accordingly. These treatments carry different accounting and tax consequences, and they are a common first-year trouble spot.

Your first year involves several deadlines calculated from different dates. You should not assume everything falls due on the anniversary of incorporation.

First statutory accounts

For a private limited company whose first accounts cover more than 12 months, the filing deadline is generally 21 months from incorporation, or three months from the accounting reference date if that is later. If your first accounts cover 12 months or less, the normal nine-month filing period applies. Because first-year periods can be unfamiliar, it is worth checking the exact accounting reference date shown at Companies House rather than working from an assumed deadline.

Corporation Tax — two returns, not one

Companies House normally sets your accounting reference date as the last day of the month in which the first anniversary of incorporation falls. That can mean your first statutory accounts cover slightly more than 12 months. A Corporation Tax accounting period cannot exceed 12 months, so if your company traded throughout that longer first period, you may need two Company Tax Returns to cover it. One set of statutory accounts can therefore sit behind two Corporation Tax periods — one of the more easily missed first-year differences.

Corporation Tax is due nine months and one day after the end of the relevant accounting period. That payment date comes before the Company Tax Return filing deadline, so calculate your likely liability early enough to reserve the cash. Since 1 April 2026, the old joint HMRC online service for filing company accounts and Company Tax Returns is no longer available; returns now need to be filed using suitable commercial software.

Confirmation statement

Your first confirmation statement review period normally ends 12 months after incorporation, and you then have 14 days to file. You still need to file one even if nothing has changed. From August 2026, Companies House identity verification requirements are also part of the process — new directors appointed from 18 November 2025 must verify their identity, and existing directors are being brought into the regime through their next confirmation statement during the transition period.

VAT and payroll

VAT is based on taxable turnover, not the date your annual accounts are due. As at August 2026, compulsory VAT registration applies when your taxable turnover for the previous 12 months exceeds £90,000, or when you expect it to exceed that figure in the next 30 days. A fast-growing first-year company may need to deal with VAT months before its first statutory accounts are prepared.

If your company pays directors or employees through payroll and PAYE registration is required, those responsibilities begin when payments start. Trying to reconstruct director salary payments at year-end creates discrepancies between bank transactions, payroll records and HMRC submissions. Payroll should be set up correctly from the outset.

A missed deadline can mean penalties, interest and additional administration. Companies House late-filing penalties for private companies currently start at £150 for accounts up to one month late, rising to £375 (one to three months late), £750 (three to six months late) and £1,500 (more than six months late). The penalty doubles when accounts are filed late in two successive financial years.

Late Corporation Tax payment and a late Company Tax Return are treated separately. HMRC can charge interest on late payment; separate penalties arise on the filing. Track the payment date and return date independently.

Poor bookkeeping can also distort the tax calculation. Missing expenses overstate profit. Duplicate costs, wrongly categorised assets or personal expenses treated as business costs can all shift the position in either direction. Reconciling the bookkeeping before finalising the accounts and tax computation is the way to catch those errors.

Director transactions deserve particular attention because salary, dividends, expense repayments and loans can look similar on a bank statement while carrying very different tax treatments. Clear records establish what each payment represents and whether additional reporting consequences arise.

The cash-flow dimension matters too. If you only establish your Corporation Tax, VAT or payroll liabilities shortly before payment, the cash may already have been spent. Regular bookkeeping lets you estimate liabilities throughout the year, so tax becomes part of your planning rather than a surprise at year-end.

The best time to prepare for first-year accounts is during the first year. Current records let you find errors while transactions are still fresh and give you a better view of profit, tax and available cash. A useful monthly routine includes reconciling your business bank accounts, checking sales invoices and unpaid customers, recording supplier bills and expenses, reviewing director transactions, checking payroll and VAT where applicable, reviewing your current cash balance, and estimating profit and Corporation Tax. None of these needs to become a complicated monthly exercise; the value is in keeping the information current.

Before year-end, review outstanding sales and costs, stock where relevant, asset purchases, director loan balances, payroll, VAT, bad debts and any significant transactions that need supporting documents. This gives you time to correct omissions before the statutory accounts are prepared.

When estimating your first Corporation Tax bill, base the reserve on taxable profit rather than an arbitrary percentage of the bank balance. Accounting profit and taxable profit are not always identical — allowable expenses, capital allowances and other adjustments can change the final calculation, so the estimate should be refreshed as the year progresses.

Good accounting software helps you keep bank transactions reconciled, retain supporting documents and maintain cleaner records throughout the year. It also matters more since the April 2026 closure of HMRC's old joint online filing service. When your first-year accounts are approaching, the first step is to establish the exact deadlines, bring the bookkeeping up to date, and identify missing information before accounts preparation begins. OD Accountants' first-year accounts service covers the statutory accounts, Corporation Tax calculation and related first-year filings for directors at exactly this stage.