How to pay your Corporation Tax bill
Written by Akhtar Rana, FAIA · Last reviewed
Corporation Tax is due 9 months and 1 day after the end of your accounting period, if your taxable profits are £1.5 million or less. You cannot pay by post. And the payment reference is different every year.
That last sentence is where most of the trouble starts.
Figures are correct at the date of review. Always check GOV.UK for the latest.
The deadline catches people out, and here is why
Your Corporation Tax payment is due before your Company Tax Return is.
- Payment: 9 months and 1 day after the accounting period ends
- Filing: 12 months after the accounting period ends
That is a three month gap, and the money is due first. Most people assume you pay when you file. You do not. You work out what you owe, pay it, and file the return afterwards.
If your accounting period ended on 31 March 2026, your Corporation Tax is due by 1 January 2027, and your return by 31 March 2027.
Taxable profits over £1.5 million? You pay in quarterly instalments instead. Different rules, and worth taking advice on.
The 17-character reference, and the mistake that costs money
Your Corporation Tax payment reference is 17 characters long, and it is different for every accounting period.
People reuse last year's. The payment lands in the wrong period. HMRC shows the current year as unpaid, sends a penalty and charges interest, while sitting on your money in a different pot.
It is a genuinely awful way to lose a few hundred pounds, and it happens constantly.
Find the right one:
- On your "notice to deliver your Company Tax Return"
- On any HMRC reminder for that period
- In your company's HMRC online account
Check it matches the period you are paying for. Every time. Ten seconds, and it saves a very tedious phone call.
How long each payment method takes
Same or next day: approve a payment through your online bank account, online or telephone banking by Faster Payments or CHAPS, debit or corporate credit card online, or at your bank or building society.
Three working days: Bacs, or Direct Debit if you have set one up with HMRC before.
Five working days: Direct Debit, if this is your first one with HMRC.
You cannot pay Corporation Tax by post.
If the deadline lands on a weekend or bank holiday
Your payment must reach HMRC on the last working day before it. Not the day after.
The one exception is Faster Payments through online or telephone banking, which clears on weekends and bank holidays.
This is the second most common way people are late. They see a Sunday deadline, pay on Monday, and are technically late.
What happens if you pay late
HMRC charges interest from the day after the payment was due until the day it is paid.
Late filing penalties are separate. You are penalised for filing your Company Tax Return late even if there is no tax to pay. Nil return, still a penalty.
If you genuinely cannot pay, contact HMRC before the deadline. A Time to Pay arrangement is a real thing, and it is far easier to arrange while you are still compliant.
Paying early
HMRC pays you interest if you pay your Corporation Tax early. It is not a fortune, but it is more than most business current accounts pay, and it costs you nothing but the timing.
Work out what you owe
Use our Corporation Tax calculator to work out your bill, including marginal relief and associated companies, and see your exact payment and filing deadlines.
Akhtar Rana, FAIA
Akhtar is the founder of Xpert Tax Accountants and a Fellow of the Association of International Accountants, holding an AIA practising certificate. He works with business owners across Greater Manchester and the rest of the UK.
Verify his membership on the AIA register →
Xpert Tax Accountants is regulated by the AIA. We are not authorised by the Financial Conduct Authority and do not give investment, pension or insurance advice.
Xpert Tax Accountants is regulated by the Association of International Accountants. We are not authorised or regulated by the Financial Conduct Authority and we do not give investment, pension or insurance advice, or arrange financial products. Our content is general information about UK tax, not advice for your circumstances, and no responsibility is accepted to any person acting on the basis of it.
Paying Corporation Tax: frequently asked questions
When is Corporation Tax due?+
Nine months and one day after the end of your accounting period, if taxable profits are £1.5m or less. For a 31 March year end, that is 1 January.
Do I pay before or after I file?+
Before. Payment at 9 months and 1 day, return at 12 months. A three month gap, and it surprises almost everybody.
Where is my payment reference?+
On your notice to deliver your return, on HMRC reminders, or in your HMRC online account. It is 17 characters and it changes every accounting period.
Can I pay by post?+
No.
What if I pay late?+
Interest from the day after the due date. Late filing of the return is a separate penalty, even with no tax to pay.
Can I pay in instalments?+
Only if taxable profits exceed £1.5 million, where quarterly instalments are compulsory. Below that it is a single payment. If you cannot afford it, speak to HMRC about Time to Pay before the deadline.
Related and next steps
Want a hand with Corporation Tax?
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