“Paying Corporation Tax on time isn’t just a legal obligation – it’s a sign that your business is organised, profitable and in control of its future.”
Nigel Holland BA (Hons) FCA
How and When to Pay Your Corporation Tax
Corporation Tax is paid by UK limited companies and certain other organisations on their taxable profits. HMRC does not automatically collect it, so you must calculate the amount due and make the payment yourself. Understanding the deadlines, payment methods and key requirements is essential to avoid penalties and interest.
1. When is Corporation Tax due?
There are two important deadlines:
• The Corporation Tax payment is due 9 months and 1 day after the end of your accounting period.
• The Company Tax Return (CT600) must be filed within 12 months of the end of your accounting period.
Your accounting period is normally the same as your financial year.
Example: If your year end is 31 March 2025
• Tax payment due: 1 January 2026
• Tax return filing deadline: 31 March 2026
Larger companies – quarterly instalments
If your taxable profits exceed £1.5 million (adjusted for associated companies), you may have to pay Corporation Tax in quarterly instalments. Most small and medium-sized companies pay in one lump sum 9 months and 1 day after the year end.
2. How to calculate the amount to pay
To know how much to pay, you must:
• Prepare your Corporation Tax computation
• Complete your CT600 Company Tax Return
• Apply the correct Corporation Tax rate for the profit level and year
Once the amount is calculated, it must be paid even if the tax return itself is not yet due.
3. Finding your payment reference
You must use a 17-character Corporation Tax payment reference so HMRC can allocate the payment correctly. You can find this reference on:
• Your HMRC ‘Notice to deliver a Company Tax Return’
• Payment reminders from HMRC
• Your Business Tax Account online, under Corporation Tax and Accounting periods
Always check that the reference matches the correct accounting period to avoid misallocation by HMRC.
4. Ways to pay your Corporation Tax
HMRC accepts payments by various methods. The time each takes to clear is important, especially near the deadline.
Same day or next day payment methods
• Approve a payment through your HMRC online Business Tax Account
• Faster Payments or CHAPS via your online banking
• Pay with a debit card or corporate credit card via the HMRC website
• Pay at your bank using a paying-in slip (if provided by HMRC)
Payment methods that take around 3 working days
• Bacs transfer
• Direct Debit (if already set up with HMRC)
Payment methods that take up to 5 working days
• Direct Debit (first time setup)
Once the Direct Debit is in place, future payments usually clear in around three working days.
Important note
You cannot pay Corporation Tax by sending a cheque in the post directly to HMRC.
5. Paying online through your Business Tax Account
You can pay directly through your HMRC Business Tax Account. The steps are:
• Log in to your Business Tax Account
• Select Corporation Tax
• Choose the correct accounting period
• Click ‘Make a payment’ and select your payment method
• Confirm the amount, approve the payment and keep a record of the confirmation
6. If you pay late
If payment is late, HMRC charges daily interest from the day after the deadline until the payment is made. Late filing of the tax return can also lead to separate penalties.
Persistent late payments may attract further scrutiny from HMRC and affect your company’s credibility with lenders and suppliers.
7. Practical tips to avoid problems
• Record your deadlines as soon as your accounts year end is confirmed
• Keep bookkeeping up to date to help estimate your expected tax bill
• Set aside funds for Corporation Tax throughout the year
• Make sure you always use the correct payment reference
• Allow enough time for the payment to clear with HMRC, especially around weekends or bank holidays
8. Summary
• Your Corporation Tax payment deadline is 9 months and 1 day after your accounting period ends.
• Your Company Tax Return is due 12 months after the end of the accounting period.
• Payments must always include the correct 17-character reference.
• Use a payment method that ensures the money reaches HMRC on time.
• Prepare early, plan your cash flow and avoid last-minute payments.
