Corporation tax is a key consideration for every UK limited company, with HM Revenue & Customs (HMRC) expecting timely payments to avoid penalties. In 2026/26, over 1.5 million companies in the UK will be liable for corporation tax, making it essential for business owners to understand when and how to pay. Missing deadlines can lead to costly fines, so staying informed is crucial.
| Corporation Tax Key Figures (2026/27) | Amount |
|---|---|
| Corporation Tax Rate (small profits up to £50,000) | 19% |
| Main Corporation Tax Rate (profits above £250,000) | 25% |
| Payment Deadline (for accounting periods up to 12 months) | 9 months and 1 day after period end |
| Late Payment Penalty | 5% of unpaid tax after 30 days |
When Is Corporation Tax Due?
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Use Free Tax Calculator →Corporation tax is due 9 months and 1 day after the end of your company’s accounting period. For example, if your accounting period ends on 31 March 2025, your corporation tax payment deadline will be 1 January 2026. It is important to note that this deadline applies whether or not you have filed your company tax return.
Your accounting period is usually 12 months long, corresponding to your company’s financial year. If your accounting period is shorter or longer, or if you have multiple accounting periods in a year, the payment dates will adjust accordingly.
HMRC requires companies to pay corporation tax within this timeframe to avoid penalties and interest. Unlike self-assessment tax, corporation tax does not have interim payment dates unless your profits exceed £1.5 million, in which case you might need to pay in instalments.
How to Pay Your Corporation Tax
Paying corporation tax is straightforward and can be done through several methods accepted by HMRC. The majority of companies opt to pay online because it is fast, secure, and ensures your payment is credited promptly.
Common payment methods include:
- Online or telephone banking using CHAPS, Faster Payments, or Bacs.
- Direct Debit (for companies that set this up through their HMRC online account).
- Debit or credit card payments through HMRC’s online portal.
- Bank giro credit or cheque (less common and slower).
For online payments, you will need your 17-character Unique Taxpayer Reference (UTR) and your company name exactly as registered with Companies House. You should use the correct HMRC bank account details, which can be found on GOV.UK’s official corporation tax payment page.
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Late Payments and Penalties
Failing to pay your corporation tax by the deadline can lead to financial penalties and interest charges. HMRC is strict about collection and has a range of sanctions which may apply if you miss your payment date.
The penalty regime is as follows:
- After 30 days late: 5% penalty on the unpaid tax amount.
- After 6 months late: Additional 5% penalty on the unpaid tax.
- After 12 months late: Further 5% penalty on the unpaid tax.
In addition to penalties, HMRC charges interest on late payments, which accrues daily from the due date until the tax is paid in full. This can quickly increase your liability.
What to Do If You Can’t Pay on Time
If you know you will not be able to pay your corporation tax by the deadline, it is vital to act promptly. Contact HMRC as soon as possible to discuss a “Time to Pay” arrangement, which can help you spread the cost over a longer period.
HMRC typically expects evidence of your financial situation and a realistic proposal for repayment. Setting up a Time to Pay agreement early can reduce penalties and give your business breathing room while you manage cash flow.
Setting Up a Time to Pay Arrangement
A Time to Pay (TTP) arrangement is an instalment plan available for businesses struggling to pay their corporation tax on time. This can be arranged directly with HMRC either online or by phone.
To set up a TTP agreement, you should:
- Log into your HMRC online account or call HMRC’s dedicated helpline.
- Provide details of your company’s financial position and why you need the arrangement.
- Agree on a repayment schedule that fits your cash flow.
- Stick to the agreed plan to avoid enforcement action.
HMRC is generally cooperative if you engage early and provide honest information. However, missing payments under a TTP deal can result in termination of the agreement and immediate demand for full payment.
Filing Your Company Tax Return
Paying your corporation tax is only one part of your annual obligations. You must also file a company tax return (CT600) with HMRC within 12 months of your accounting period end. This return calculates the exact tax due based on your company’s profits.
The payment deadline for corporation tax is earlier than the filing deadline, so you must pay an estimated amount before submitting your return. Once HMRC processes your CT600, they may issue a balancing payment or refund if you overpaid.
Failing to file your company tax return on time can lead to separate penalties, regardless of whether you have paid the tax. For full guidance on filing, see GOV.UK’s Corporation Tax guide.
- Corporation tax payment is due 9 months and 1 day after your accounting period ends.
- Use HMRC’s online services or approved banking methods to pay corporation tax securely.
- Missing the payment deadline can result in penalties and interest charges.
- If you cannot pay on time, contact HMRC early to arrange a Time to Pay instalment plan.
- Remember to file your company tax return within 12 months to avoid separate fines.
When exactly do I need to pay my corporation tax?
You must pay your corporation tax within 9 months and 1 day after your company’s accounting period ends. For example, if your accounting period ends on 31 March 2026, payment is due by 1 January 2026.
What happens if I miss the corporation tax payment deadline?
If you miss the deadline, HMRC will charge a 5% penalty on the unpaid tax after 30 days, with further penalties at 6 and 12 months. Interest will also be charged on late payments, increasing your overall liability.
Can I pay my corporation tax in instalments?
Yes, if you cannot pay in full on time, you can contact HMRC to set up a Time to Pay arrangement. This lets you spread your corporation tax payments over a longer period, subject to agreement with HMRC.
Official Sources
* GOV.UK: Set up a business · * HMRC: Income Tax rates · * HMRC: Corporation Tax · * HMRC: VAT registration