Accountant For A Limited Company

How Do I Pay Corporation Tax?

Pay corporation tax to HMRC within 9 months and 1 day of the end of the accounting period, using Faster Payments, CHAPS, Bacs, online banking, debit card or Direct Debit and quoting the 17-character payment reference for that period. A CT600 return must still be filed within 12 months of the period end.

By Jordan Macey MAAT Reviewed by Noor Fiaz Updated 16 Apr 2026 7

Key takeaways

Corporation tax for small and medium companies is payable 9 months and 1 day after the end of the accounting period.
Large companies with profits above £1.5 million pay in quarterly instalments in months 7, 10, 13 and 16 after period start.
HMRC accepts Faster Payments, CHAPS, Bacs, online banking, debit or corporate credit card and Direct Debit for corporation tax.
Every payment needs the unique 17-character corporation tax reference for that accounting period, not the company UTR.
Rates for 2025/26 are 19% up to £50,000, 25% above £250,000 and a marginal rate between, with late payment interest charged daily.

Paying Corporation Tax Bill

Corporation Tax is a tax that limited companies in the UK need to pay on their profits. Unlike Income Tax, which is automatically deducted from salaries through PAYE, Corporation Tax is aimed specifically at businesses. If you’re running a limited company, you’ll need to calculate your tax based on your profits, file a return to HMRC, and pay corporation tax by the deadline.

Making sure to pay Corporation Tax before the deadline is important to avoid any financial penalties and interest fees. HMRC imposes fines for late payments, and these can really add up if you’re not careful. Plus, falling behind on payments can hurt a company’s cash flow and tarnish its financial reputation.

Who Needs to Pay Corporation Tax?

All UK-registered limited companies must pay Corporation Tax on their profits. This includes earnings from:

Trading activities.
Selling assets like land, property, or shares (capital gains).
Investments or interest earned.

Corporation Tax applies to:

Limited companies registered in the UK
Foreign companies with UK branches that make a profit in the country
Clubs, cooperatives, and trade associations that generate taxable profits

If a company makes a profit, it must report this to HMRC and pay the correct amount of Corporation Tax. Even if a business does not owe any tax, it must still file a tax return.

How to Pay Corporation Tax

Paying Corporation Tax is an important duty for businesses in the UK. If your company turns a profit, you’ll need to figure out how much tax you owe and make sure to pay it to HMRC by the deadline. Here are steps to help you follow the process of paying Corporation Tax correctly.

1. Know Your Corporation Tax Payment Deadline

The deadlines for Corporation Tax depend on your company’s financial year. You’ll need to pay your tax nine months and one day after the end of your accounting period.

For instance: If your accounting period wraps up on 31st March, your tax payment will be due by 1st January of the following year. If your profits exceed £1.5 million, you might have to make payments in instalments.

2. Figure Out How Much You Owe

To determine your Corporation Tax liability, you’ll need to calculate your company’s taxable profits. Taxable profits include:

Trading profits from your core business activities
Income from investments like interest or dividends
Chargeable gains from selling assets such as property or equipment

What Can Lower Your Taxable Profits?

Allowable business expenses (like wages, rent, and office costs)
Capital allowances for equipment and machinery
R&D tax relief if your business invests in innovation

Make sure to keep precise financial records so you can easily track your income and expenses. This way, you’ll be able to report the right amount to HMRC, helping you steer clear of underpaying or overpaying.

3. Get Your Corporation Tax Return Ready

To pay Corporation Tax, you’ll need to fill out a Company Tax Return (CT600). This return informs HMRC about your company’s profits and the tax owed.

Steps to Prepare Your Tax Return:

Gather Financial Information: Collect all records of income, expenses, and allowances.
Complete the CT600 Form: Use HMRC’s online portal to fill out the form.
Submit the Return: Make sure to file the return online by the deadline, even if your company doesn’t owe any tax.

4. Calculate Your Corporation Tax Liability

Corporation Tax rates vary based on your company’s profits. For the 2024/25 tax year:

19% if profits are £50,000 or less (small profits rate)
25% if profits exceed £250,000 (main rate)
Marginal Relief applies if profits fall between £50,000 and £250,000.

Use corporation tax calculator to avoid manual calculation and work out the tax you owe in minutes.

5. Pay Your Corporation Tax Bill

Once you’ve figured out how much you owe, you can pay it using one of HMRC’s approved payment methods. Keep in mind that each method has its own processing time, so it’s a good idea to pay early to ensure you meet the deadline.

If you think you might have trouble making a payment, contact HMRC right away to talk about potential arrangements.

Ways to Pay Corporation Tax

HMRC offers different payment methods to pay easily. The best choice for you really depends on how fast you need your payment to reach HMRC.

Same day or next day

approve a payment through your online bank account
online or telephone banking by Faster Payments or CHAPS
online by debit or corporate credit card

3 working days

Direct Debit (if you’ve set up one for HMRC before)
online or telephone banking by Bacs
at your bank or building society

5 working days

Direct Debit (if you have not set up one for HMRC before)

If your deadline falls on a weekend or a bank holiday, be sure to reach your payment to HMRC by the last working day before that date.

Watch below video from HMRC to know Corporation Tax deadlines and learn how to make payments:

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Need Help with Corporation Tax Filing & Payments?

Paying Corporation Tax on time is a crucial aspect of managing a business in the UK. By understanding the deadlines, accurately calculating your tax, and selecting the right payment method, you can get rid of penalties and interest charges. Keeping precise records and planning ahead can also simplify the whole process.

Many business owners find tax regulations to be quite complex, especially when it comes to deductions, reliefs, and fluctuating tax rates. Partnering with an accountant can save you a lot of time and help you dodge mistakes. A skilled accountant can determine your tax liability, file your Company Tax Return, and keep you informed about payment deadlines.

At GoForma, we strive to make Corporation Tax hassle-free. Our team of expert limited company accountants is here to provide comprehensive support for tax calculations, returns, and payments. Whether you’re running a small business or a growing enterprise, we offer tailored services to fit your needs.

Book a free consultation today and let GoForma take the stress out of Corporation Tax for you!

Frequently asked questions

When is corporation tax due in the UK?

Corporation tax for most small and medium companies is due 9 months and 1 day after the end of the accounting period. A company with a year end of 31 March 2026 must therefore pay by 1 January 2027. The CT600 return is separate and must be filed within 12 months of the period end. Large companies with profits above £1.5 million pay earlier, in quarterly instalments.

What payment methods does HMRC accept for corporation tax?

HMRC accepts Faster Payments, CHAPS, online or telephone banking, Bacs, debit or corporate credit card and Direct Debit. Faster Payments, CHAPS and approved online bank payments reach HMRC the same or next working day. Bacs and existing Direct Debits take about 3 working days, and a first-time Direct Debit takes 5. Payment at a bank or building society branch is also available with an HMRC paying-in slip.

What is the corporation tax payment reference and where is it found?

Each accounting period has its own 17-character corporation tax reference issued by HMRC. It is shown on the payment reminder or notice to deliver a return and inside the company's HMRC online account. Using the reference for the wrong period is one of the most common causes of misallocated payments, so check the characters carefully before paying. The company UTR alone is not enough to identify a specific period.

Do large companies pay corporation tax in instalments?

Yes. Companies with taxable profits above £1.5 million pay corporation tax in quarterly instalment payments (QIPs), due in months 7, 10, 13 and 16 after the start of the accounting period. Very large companies with profits above £20 million pay earlier, in months 3, 6, 9 and 12. The £1.5 million and £20 million thresholds are divided between group companies and adjusted for short accounting periods.

What happens if corporation tax is paid late?

HMRC charges late payment interest from the day after the due date until the bill is paid, calculated daily at the official rate set by reference to the Bank of England base rate plus a margin. Persistent late payment, or failure to file the CT600 on time, can also trigger penalties of £100, rising with the length of delay. Interest charged by HMRC on unpaid corporation tax is a disallowable expense.

Does a company still need to file if no corporation tax is owed?

Yes. An active company must file a CT600 return within 12 months of the end of the accounting period, even if profits are nil or a loss has been made. A nil return confirms the position to HMRC and starts the clock on the enquiry window. Companies that have become dormant need to notify HMRC separately; until that notification is processed, filing obligations continue.

How long does a corporation tax payment take to reach HMRC?

Online banking by Faster Payments, CHAPS and payments approved through the company's online bank account usually reach HMRC the same or the next working day. Bacs, online telephone banking by Bacs, an existing Direct Debit and branch payments at a bank or building society take about 3 working days. A first-time Direct Debit takes around 5 working days, so it should be set up well in advance of the deadline.

Can corporation tax be paid in instalments for cash flow reasons?

A company that cannot pay its corporation tax in full by the due date can ask HMRC for a Time to Pay arrangement, which spreads the bill over an agreed period. Interest still accrues, but agreed arrangements usually avoid late payment penalties. Contact HMRC before the deadline rather than after. This is separate from the statutory quarterly instalment regime, which only applies to large companies with profits above £1.5 million.