1. When Is Corporation Tax Due?
Your corporation tax bill must be paid 9 months and 1 day after the end of your company’s accounting period. For example, if your accounting period ends on 31 March, your tax is due by 1 January the following year.
2. Who Needs to Pay Corporation Tax?
All UK-based limited companies must pay corporation tax on:
- Trading profits
- Investment income
- Gains from selling assets
Even if you make no profit, you must still file a tax return with HMRC.
3. How to Register for Corporation Tax
After forming your limited company, register for corporation tax with HMRC within 3 months of starting to trade. You’ll need:
- Your company’s UTR (Unique Taxpayer Reference)
- Business start date
- Accounting period details
4. Payment Methods for Corporation Tax Bill
HMRC accepts several payment methods:
- Online or telephone banking (Faster Payments, BACS, CHAPS)
- Debit or corporate credit card (online only)
- Direct Debit (one-off or scheduled)
- At your bank or building society (if still offered)
Always include your 17-character payment reference from HMRC to ensure it’s allocated correctly.
5. Where to Make Payment
Pay through the official HMRC website at www.gov.uk/pay-corporation-tax
Choose the method that suits your business and allows enough time for the payment to clear by the due date.
6. Confirming Your Payment
Once your payment is made:
- Keep the confirmation reference
- Monitor your business tax account for confirmation
- Reconcile the payment with your company accounts
7. Penalties for Late Payment
- Interest is charged from the day after the due date
- Persistent late payment can lead to additional fines
- Filing your Company Tax Return late triggers separate penalties starting at £100
8. Paying Early or in Instalments
You can pay early—HMRC won’t pay interest but it ensures you don’t miss the deadline. Large companies with over £1.5 million in profits usually pay in quarterly instalments.
9. Use Accounting Software for Reminders
Use tools like Xero, QuickBooks, or FreeAgent to:
- Track deadlines
- Calculate tax due
- Integrate with HMRC systems (Making Tax Digital compliant)
10. Need Help Paying Your Tax Bill?
If you’re struggling, contact HMRC before the due date. They may offer:
- A Time to Pay Arrangement
- Instalment options
- Guidance on managing liabilities
Frequently Asked Questions
Can I pay my corporation tax bill in cash?
No, HMRC does not accept cash payments.
Can I pay corporation tax monthly?
Not by default, but you can set up a Time to Pay arrangement or prepay voluntarily.
Do I need a tax advisor to pay corporation tax?
Not necessarily, but an accountant can help ensure accurate calculation and timely filing.
What happens if I overpay my corporation tax?
HMRC will refund the excess or apply it to future liabilities.
Can I pay corporation tax using a personal bank account?
Yes, but it’s recommended to use your company account for clear financial records.
What if I miss the payment deadline?
Interest accrues daily, and persistent delays can lead to HMRC enforcement actions.
Conclusion
Paying your corporation tax bill on time is essential to keeping your business compliant and avoiding unnecessary costs. By understanding the due dates, choosing the right payment method, and keeping clear records, you ensure smooth financial operations and peace of mind.