Corporation Tax Payment Deadlines

Introduction

At Towerstone Accountants we provide specialist limited company accountancy services for directors and owner managed businesses across the UK. We created this webpage for company owners who want clear guidance on Corporation Tax, including how it is calculated, when it is due, and how it should be paid. Our aim is to help you understand your obligations, avoid penalties, and manage your company tax position with confidence.

Knowing exactly when Corporation Tax is due is one of the most important responsibilities of running a limited company, yet it is also one of the most commonly misunderstood. I regularly speak to directors who assume the tax is due when the accounts are filed, or who believe their accountant will automatically deal with payment for them. Unfortunately, those assumptions often lead to late payments, interest charges, and avoidable stress.

Corporation Tax works on a strict timetable, and HMRC does not issue reminders in the way people expect. The obligation to calculate the tax, set the money aside, and pay it on time always sits with the company. Missing the deadline does not usually result in an immediate penalty, but interest starts accruing straight away and escalation can follow if the position is ignored.

In this article, I am going to explain clearly and practically when Corporation Tax is due in the UK, how the deadlines work, how they differ from filing deadlines, what happens if you miss them, and how to plan ahead so the payment never becomes a problem. This is written from a real world UK perspective, based on the issues I see repeatedly in practice.

What Corporation Tax actually is

Corporation Tax is the tax a limited company pays on its taxable profits.

These profits can include:

• Trading profits
• Investment income
• Chargeable gains on asset sales

Corporation Tax is charged on the company itself, not on the directors or shareholders personally. This is an important distinction, because it means the company must pay the tax regardless of whether profits are taken out or left in the business.

Corporation Tax is administered by HM Revenue and Customs, commonly referred to as HMRC.

The key Corporation Tax deadlines at a glance

There are two main Corporation Tax deadlines every company needs to understand.

The payment deadline
The filing deadline

These two dates are different, and confusing them is one of the main reasons companies end up paying late.

In simple terms:

• Corporation Tax is usually due 9 months and 1 day after the end of the accounting period
• The Corporation Tax return is due 12 months after the end of the accounting period

This means the tax must usually be paid before the return itself is filed.

Understanding the accounting period

To understand when Corporation Tax is due, you first need to understand your accounting period.

An accounting period is the period your company’s accounts cover. For most companies, this is 12 months, often aligned to a financial year end chosen at incorporation.

Common examples include:

• Year ending 31 March
• Year ending 31 December
• Year ending 30 June

The accounting period end date is the starting point for all Corporation Tax deadlines.

The standard Corporation Tax payment deadline

For most small and medium sized UK companies, Corporation Tax is due 9 months and 1 day after the end of the accounting period.

This applies to companies that are not classed as large or very large for Corporation Tax purposes.

For example:

If your company’s year end is 31 March 2024
Corporation Tax is due by 1 January 2025

If your company’s year end is 31 December 2024
Corporation Tax is due by 1 October 2025

The extra one day is important and is often overlooked.

Why payment is due before the return is filed

One of the most common questions I get is why Corporation Tax has to be paid before the Corporation Tax return is due.

The reason is simple. HMRC expects companies to be able to estimate their tax liability based on their accounts, even if the final return has not yet been submitted.

In practice, this means:

• Accounts are usually prepared well before the filing deadline
• The tax calculation is known in advance
• Payment should be planned and made on time

Waiting until the return filing deadline to think about payment almost always results in late payment.

Corporation Tax filing deadline explained

The Corporation Tax return, known as the CT600, must be filed within 12 months of the end of the accounting period.

Using the same examples:

Year end 31 March 2024
CT600 filing deadline 31 March 2025

Year end 31 December 2024
CT600 filing deadline 31 December 2025

Filing the return late results in penalties, even if the tax itself was paid on time.

What happens in the first year of trading

The first year of trading can be confusing, because the first accounting period can be longer than 12 months.

A company can have:

• A first set of accounts up to 18 months long
• Two Corporation Tax accounting periods within that time

This means there may be two separate Corporation Tax calculations and payment deadlines.

For example, a company might:

• Incorporate on 1 January
• Prepare first accounts to 31 December the following year

This creates two Corporation Tax periods, each with its own payment deadline.

This is an area where professional advice is often valuable, as the deadlines can catch people out.

When Corporation Tax is due for dormant companies

Dormant companies generally do not pay Corporation Tax, because they have no taxable profits.

However, this does not mean HMRC automatically knows the company is dormant.

If a company has previously traded or been registered for Corporation Tax, you must tell HMRC that it is now dormant. Otherwise, HMRC may continue to issue return notices.

If HMRC expects a return and does not receive one, penalties can arise, even if no tax is due.

When Corporation Tax is due for companies that stop trading

If a company stops trading part way through an accounting period, Corporation Tax is still due for the period up to cessation.

In these cases:

• A final set of accounts is prepared to the cessation date
• Corporation Tax is calculated on profits to that date
• Payment is due 9 months and 1 day after the end of that period

Stopping trading does not remove the obligation to pay tax on profits already made.

Large companies and different payment rules

Large and very large companies follow different Corporation Tax payment rules.

Instead of paying Corporation Tax in one lump sum after the year end, they may be required to pay tax in instalments during the accounting period.

These rules are complex and based on profit thresholds.

Most owner managed companies fall outside these rules, but businesses that grow quickly can find themselves unexpectedly caught by them.

This is another reason why regular reviews of tax position are important.

How Corporation Tax is actually paid

Corporation Tax is paid directly to HMRC, usually by:

• Online or telephone banking
• Faster Payments
• CHAPS

HMRC does not accept payment by cheque in most cases.

It is essential to use the correct Corporation Tax reference when making payment, as misallocated payments can appear as unpaid even when money has left your account.

What happens if Corporation Tax is paid late

There is no fixed late payment penalty for Corporation Tax in the way there is for VAT or PAYE.

However, interest is charged from the day after the due date until the tax is paid in full.

Key points about late payment interest:

• It accrues daily
• It is automatic
• It cannot usually be appealed
• It is not tax deductible

While interest may seem small at first, it adds up quickly on larger balances.

Late filing penalties are separate

It is important to separate late payment from late filing.

Late filing of the Corporation Tax return results in penalties, even if the tax was paid on time.

Penalties typically include:

• A £100 penalty for being 1 day late
• A further £100 penalty after 3 months
• Additional penalties if the return is significantly late

This means you can be fully paid up but still fined for late filing.

What happens if Corporation Tax remains unpaid

If Corporation Tax remains unpaid for an extended period, HMRC can escalate the matter.

This may involve:

• Debt collection letters
• Telephone contact
• Time to Pay discussions
• Enforcement action

HMRC is usually more cooperative when companies engage early rather than ignoring the issue.

Time to Pay arrangements

If a company cannot pay its Corporation Tax on time, it may be able to agree a Time to Pay arrangement with HMRC.

This allows the tax to be paid in instalments over an agreed period.

Important points to understand:

• Interest still applies
• The arrangement must be agreed in advance or as soon as possible
• Missing payments can cancel the arrangement

Time to Pay is not automatic, but it is often available where difficulties are temporary and communication is prompt.

Common reasons Corporation Tax is paid late

Based on my experience, the most common reasons include:

• Confusing payment and filing deadlines
• Poor cash flow planning
• Waiting for final accounts
• Assuming the accountant handles payment
• Not setting funds aside

Almost all of these are avoidable with basic planning.

How to plan for Corporation Tax properly

In my professional opinion, the best way to avoid problems is to treat Corporation Tax as a regular outgoing rather than a one off bill.

Practical steps include:

• Estimating tax quarterly
• Setting aside funds monthly
• Reviewing management accounts
• Diarising payment deadlines
• Confirming payment once made

This approach removes most of the stress around Corporation Tax.

Corporation Tax and dividends

Another common misunderstanding is the relationship between Corporation Tax and dividends.

Corporation Tax must be paid on company profits before dividends can be paid lawfully.

Paying dividends without allowing for Corporation Tax can result in illegal dividends and future tax problems.

This is why Corporation Tax planning and dividend planning should always go hand in hand.

How accountants fit into the process

Accountants usually:

• Prepare the accounts
• Calculate the Corporation Tax liability
• Prepare the Corporation Tax return

However, in most cases, they do not physically make the payment to HMRC unless specifically agreed.

The responsibility for payment always remains with the company and its directors.

Clarifying who does what avoids misunderstandings.

Checking your Corporation Tax position

You can check your Corporation Tax position through your HMRC online account.

This allows you to:

• See amounts due
• Check payment deadlines
• Confirm payments received

Regularly checking this helps catch issues early.

What to do if you are unsure about your deadline

If you are unsure when your Corporation Tax is due, the safest steps are:

• Check your accounting period end
• Count 9 months and 1 day forward
• Confirm with your accountant
• Check your HMRC online account

Guessing is rarely a good idea where tax deadlines are concerned.

Common mistakes I see in practice

Based on my experience, the most frequent errors include:

• Paying on the CT600 deadline instead of the payment deadline
• Forgetting the first year complexities
• Not informing HMRC when trading stops
• Using the wrong payment reference
• Assuming no reminders means no action

These mistakes are costly but avoidable.

Final thoughts

Corporation Tax is usually due 9 months and 1 day after the end of your accounting period, which is earlier than many people expect. The return itself is due later, and confusing these two deadlines is one of the most common causes of late payment.

In my professional opinion, understanding and planning for the Corporation Tax payment date is far more important than focusing solely on the filing deadline. When tax is estimated early, funds are set aside, and deadlines are diarised, Corporation Tax becomes a routine part of running a company rather than a recurring problem.

Getting this right protects cash flow, avoids interest and enforcement, and allows you to run the business with confidence rather than last minute pressure.

You may also find our guidance on how to pay corporation tax and change of accounting reference date useful when dealing with related Corporation Tax questions. For a broader overview of Corporation Tax rules and support, you can visit our corporation tax help hub.