Corporation Tax

Plan your Corporation Tax payments

How to pay Corporation Tax on time, including quarterly instalments for large companies and Time to Pay arrangements.

UK-wide
Guide summary

Pay your Corporation Tax 9 months and 1 day after your accounting period ends. Large companies with profits over £1.5 million must pay in quarterly instalments during the accounting period. Set aside money monthly to avoid cash flow problems and use HMRC’s online service to pay on time.

  • Pay Corporation Tax 9 months and 1 day after accounting period ends
  • Large companies (£1.5m+ profits) pay quarterly instalments
  • Set aside 19-25% of monthly profits for tax
  • Use HMRC online payment for fastest processing
  • Late payment interest: Bank rate + 4% (currently 7.75%)
  • Quarterly instalment thresholds: £1.5m-£20m profits
  • Associated companies divide the £1.5m threshold
  • Contact HMRC before deadline if you cannot pay
  • Bank transfers take 3 days, Faster Payments same day
  • Cheques are not accepted for Corporation Tax payments
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UK-wide

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Standard payment deadline

Most companies must pay Corporation Tax 9 months and 1 day after the end of their accounting period. This is separate from the filing deadline for the CT600 return, which is 12 months after the accounting period ends.

For example, if your accounting period ends on 31 March 2025, your Corporation Tax payment is due by 1 January 2026, but your CT600 does not need to be filed until 31 March 2026.

How to pay

You can pay Corporation Tax by:

  • Direct Debit: Set up through your HMRC online account (allows single or variable payments)
  • Online banking or Faster Payments: Use your Corporation Tax payment reference (17-character code)
  • CHAPS: Same-day bank transfer for urgent payments
  • Bacs: Takes 3 working days to process

Payments by cheque or at a bank counter are no longer accepted. Always allow processing time for the payment to reach HMRC before the deadline.

Quarterly instalments for large companies

Companies with annual profits exceeding £1.5 million (adjusted for associated companies) must pay Corporation Tax in quarterly instalments during the accounting period, rather than 9 months after it ends.

Late payment consequences

If you pay Corporation Tax late, HMRC charges interest from the day after the payment deadline until the date of payment. There is no separate late payment penalty for Corporation Tax (unlike late filing), but the interest can be significant for large liabilities.

Time to Pay arrangements

If you cannot pay your Corporation Tax on time, contact HMRC before the deadline to discuss a Time to Pay (TTP) arrangement. HMRC may agree to let you pay in instalments over an agreed period, typically 6-12 months.

To negotiate a TTP arrangement, you will need to explain your financial position and propose a realistic repayment schedule. Interest continues to accrue during the arrangement, but HMRC will not take enforcement action while you keep to the agreed terms.

  1. 1

    Estimate your liability early

    Calculate your expected Corporation Tax liability during the accounting period, not after it ends. This helps with cash flow planning and identifies whether quarterly instalments apply.

  2. 2

    Set aside funds monthly

    Put aside an estimated portion of your monthly profit for Corporation Tax. A common approach is to set aside 19-25% of pre-tax profits each month into a separate bank account.

  3. 3

    Check for quarterly instalment obligations

    If your profits exceed the quarterly instalment threshold (adjusted for associated companies), you must pay in four instalments during the accounting period. Missing this obligation results in interest charges.

  4. 4

    Pay before the deadline

    Allow processing time for your chosen payment method. Faster Payments usually arrive same day, but Bacs takes 3 working days.

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