Trading profit is split on a time basis. Interest, rent, gains, donations and dividends each follow their own rule, and mixing them up misstates both accounting periods.
A long period of account needs two separate capital allowances computations, and since April 2026 they are not even calculated at the same writing down rate.
Company law allows accounts to run for 18 months; corporation tax never allows an accounting period longer than 12. Here is how the split is drawn.
The associated companies rules get more involved once a group has layers. Sub-subsidiaries, dormant holding companies and short accounting periods, worked through in a single example.
An acquisition partway through the year still counts as an associated company for the whole accounting period. What that does to your thresholds, and to your tax bill.
Two companies under common control share the same tax bands. The four control tests, why exactly 50% falls short, and what shared thresholds do to your bill.
Corporation tax rates are set by financial year, not by your accounting date. When a short or straddling period changes your thresholds, and when it changes nothing at all.
Dividends are never taxable income for a UK company, yet they can still push it into a higher rate band. How augmented profits and the 51% subsidiary rule work.
Profits between £50,000 and £250,000 are not simply taxed at 25%. Here is the marginal relief formula, a worked example, and the effective rate it actually produces.
Company donations are never an ordinary trading expense. Here is how qualifying charitable donations work, how gifts of shares and land are valued, and when a payment is really sponsorship.