Corporation Tax Payment Deadlines

Standard Payment Deadline

Most UK companies pay corporation tax in a single payment, due 9 months and 1 day after the end of their accounting period.

This deadline applies to companies with taxable profits of £1.5 million or less (adjusted for associated companies). The payment must reach HMRC by this date — allow processing time if paying by bank transfer.

Filing Deadline vs Payment Deadline

The payment deadline and filing deadline are different:

The payment deadline comes first. You must estimate your liability and pay before the return is due. If the final liability differs from the payment, the difference is settled when the return is filed.

Large Companies: Quarterly Instalment Payments

Companies with taxable profits exceeding £1.5 million in the current or previous accounting period must pay corporation tax in four quarterly instalments.

Instalment Due Dates

For a 12-month accounting period, the instalments are due in months 7, 10, 13, and 16 after the start of the accounting period:

Each instalment is due on the 14th of the month.

How to Calculate Instalments

Each instalment is one quarter (25%) of the company’s estimated corporation tax liability for the current period. The calculation is based on your best estimate of the total tax due:

If your estimate changes during the year (for example, profits are higher or lower than expected), you can adjust future instalments to even out the total. There is no requirement for each instalment to be exactly one quarter — the key is that the total across all four payments matches the final liability.

The £1.5 Million Threshold

The £1.5 million threshold is divided by the number of associated companies plus one:

Two companies are associated if one controls the other or both are under common control. Dormant companies are excluded from the count.

Very Large Companies: Accelerated Payments

Companies with taxable profits exceeding £20 million (adjusted for associated companies) must pay instalments earlier — in months 3, 6, 9, and 12 of the accounting period:

This means very large companies must pay all their corporation tax by the end of their accounting period, rather than having 7 months’ grace before the first instalment.

The £20 Million Threshold

Like the £1.5 million threshold, the £20 million limit is divided by the number of associated companies plus one:

Short Accounting Periods

If the accounting period is less than 12 months, the instalment dates are adjusted proportionally. The number of instalments may also be reduced — for example, a 6-month period may only require two or three instalments.

The profit thresholds are also proportionately reduced. For a 6-month period, the £1.5 million threshold becomes £750,000.

First Year in the Instalment Regime

A company entering the instalment regime for the first time (because profits have just exceeded £1.5 million) is not required to pay by instalments in its first year above the threshold, unless profits also exceed £10 million. This gives companies a one-year grace period.

However, if the company was large in a previous period, this exemption does not apply.

Payment Methods

Corporation tax payments can be made by:

Cheques are no longer accepted for corporation tax payments.

You need your corporation tax payment reference (your 17-character UTR) when making payments. Payments to the wrong reference can result in them being applied to the wrong account.

Interest on Late Payments

HMRC charges interest on corporation tax paid late. Interest runs from the due date to the date of payment:

• The current rate is the Bank of England base rate plus 2.5%
• Interest is calculated daily
• Interest is not a tax-deductible expense for corporation tax purposes

For companies paying by instalments, interest is charged on each instalment from its due date.

Interest on Overpayments

If you overpay corporation tax (or pay early), HMRC pays repayment interest at the Bank of England base rate minus 1% (with a minimum of 0.5%). This rate is significantly lower than the late payment rate, so there is limited benefit in paying early unless cash flow allows it.

Penalties for Late Filing

While this guide focuses on payment deadlines, the filing penalties are worth noting as they are separate:

Repeated late filing doubles the initial penalties to £500 each.

Planning and Estimating

Cash Flow Management

Companies subject to quarterly instalments must plan their cash flow carefully. Since the first instalment is due in month 7 (or month 3 for very large companies), the estimated tax must be calculated early in the accounting period.

Key planning steps:

• Prepare a reliable profit forecast early in the accounting period
• Review and adjust the estimate before each instalment due date
• Consider the impact of capital allowances and other reliefs on the final liability
• Account for any tax-deductible expenses that may reduce profits

Adjusting Instalments

If profits turn out to be higher or lower than estimated, you can adjust future instalments. HMRC does not charge penalties for reasonable underestimates, but interest will be charged if instalments are too low and the shortfall is not corrected promptly.

Record Keeping

Maintain records of:

• All corporation tax payments made, with dates and references
• Instalment calculations showing how each amount was determined
• Profit forecasts used to estimate instalments
• Correspondence with HMRC regarding payments

These form part of your overall accounting records and should be retained for at least 6 years from the end of the accounting period. Compliance with Making Tax Digital ensures these records are maintained digitally.