When is Corporation Tax Due? Key Dates and Deadlines

🎯 The Core Deadline: The 9-Month Rule

For the vast majority of UK small and medium-sized enterprises (SMEs), the deadline for paying Corporation Tax is not the same as the deadline for filing the tax return. This is a common point of confusion for new business owners who are used to the synchronized deadlines of Self Assessment.

Understanding the Payment Timeline

• The payment deadline usually falls before the filing deadline for the CT600 Company Tax Return.
• If your accounting period ends on 31st December, your tax payment is due by 1st October of the following year.
• Missing this deadline results in automatic interest charges, even if you haven't filed your return yet.

Why the Deadline is Unique

HMRC structures the deadline this way to ensure the Treasury receives funds relatively quickly after a company’s financial year concludes. By setting the payment date at nine months and one day, the government allows businesses enough time to finalize their accounts while maintaining a steady flow of tax revenue. It is essential to distinguish between "paying" the tax and "filing" the return, as the latter is typically due 12 months after the period end.

📊 Determining Your Accounting Period

Your Corporation Tax deadline is tethered strictly to your Accounting Period. This period is usually the same as the financial year covered by your annual accounts filed with Companies House, but there are instances where they may differ, particularly in your first year of trading.

Financial Year vs. Accounting Period

• A standard accounting period lasts 12 months.
• Your accounting period cannot be longer than 12 months for Corporation Tax purposes.
• If your accounts cover more than a year, you may need to file two separate tax returns to cover the "long" period.

The "First Year" Scenario

When you first start a business, your first set of accounts often covers slightly more than a year. This happens because your accounting period starts on the day you incorporate but ends on the last day of your incorporation month the following year. In this scenario, you will have two Corporation Tax deadlines: one for the first 12 months and a second for the remaining few days. Managing these startup accounting tasks correctly is vital for long-term compliance.

Changing Your Year End

If you choose to change your company’s year-end with Companies House, your Corporation Tax accounting period will also change. Shortening your year-end is relatively straightforward, but lengthening it requires careful coordination with HMRC to ensure you don't trigger accidental late-filing penalties during the transition.

💰 Payment Thresholds for Large Companies

The "9 months and 1 day" rule only applies to companies with taxable profits of up to £1.5 million. If your company is highly successful and exceeds this threshold, HMRC requires you to pay your tax in instalments, effectively bringing the payment dates forward.

Quarterly Instalment Payments (QIPs)

• Large companies (profits over £1.5m) generally pay in four equal instalments.
• Payments are typically due in months 7, 10, 13, and 16 following the start of the accounting period.
• This "pay-as-you-earn" style system for corporations ensures that large entities contribute to the economy throughout their financial year.

Very Large Companies

For companies with annual taxable profits exceeding £20 million, the deadlines are even more accelerated. These "Very Large" companies must pay their instalments in months 3, 6, 9, and 12 of their current accounting period. Essentially, the tax is paid in full before the financial year has even concluded, based on estimated profits.

⚠️ Penalties and Late Payment Consequences

HMRC is strict regarding Corporation Tax deadlines. Failing to pay on time or failing to file your CT600 return on time results in different types of penalties that can quickly diminish your company's cash flow.

Interest on Late Tax Payments

• HMRC charges late payment interest from the day after the tax was due until the date it is paid.
• This interest is tax-deductible for the company, but it is an unnecessary expense that can be avoided with proper planning.
• The interest rate is variable and usually sits several percentage points above the Bank of England base rate.

Filing Penalties (The CT600)

While the payment is due after 9 months, the return (CT600) is due after 12 months. If you miss the filing deadline, the penalties are fixed:

• 1 day late: £100 penalty.
• 3 months late: Another £100 penalty.
• 6 months late: HMRC estimates your tax bill and adds a penalty of 10% of the unpaid tax.
• 12 months late: Another 10% penalty on any unpaid tax.

📋 How to Pay and Filing Requirements

Once you have calculated how much you owe and identified the deadline, you must ensure the payment reaches HMRC using an approved method. HMRC no longer accepts payments by post or over the telephone via a live agent for most transactions.

Electronic Payment Methods

• Online/Telephone Banking (Faster Payments): Usually reaches HMRC the same day or the next day.
• CHAPS: Best for very large payments that need to be cleared on the same day.
• Direct Debit: Must be set up at least 18 to 21 days before your first payment to ensure it is processed on time.

The Importance of the Reference Number

When making a payment, you must use your 17-character Corporation Tax payslip reference for the specific accounting period. This reference changes for every period. If you use an old reference, your payment may be allocated to the wrong year, leaving you with a "late" status for the current year and an overpayment in a previous one. You can find this reference on the "notice to deliver a tax return" or within your HMRC online account.

Claiming Reliefs and Credits

Before making your final payment, ensure your accountant has calculated all available reliefs. Items such as R&D Tax Credits, Capital Allowances on machinery or technology, and Patent Box relief can significantly reduce the total amount of Corporation Tax due. Paying only what you legally owe is as important as paying it on time.

✅ Action Steps for Compliance

To ensure you never miss a Corporation Tax deadline, follow these practical steps as part of your annual business cycle.

• Mark your calendar: Immediately after your year-end, calculate the date 9 months and 1 day away and set multiple reminders.
• Ringfence your tax: Move a percentage of your monthly revenue into a separate high-yield savings account so the funds are ready when the bill arrives.
• Update HMRC: If your company becomes "dormant" or starts trading again, notify HMRC immediately to avoid incorrect "notice to file" letters.
• Review your profit: If you anticipate profits exceeding £1.5 million, speak to your accountant mid-year about quarterly instalments.
• Verify your reference number: Always double-check the 17-character reference on your HMRC portal before hitting 'send' on a bank transfer.

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