How to Pay Corporation Tax: Deadline, Reference and Methods
Quick answer
HMRC never bills you for corporation tax. The 9-months-and-1-day deadline, the 17-character reference, payment methods ranked by speed and the rates.
Quick answer: Corporation tax must be paid 9 months and 1 day after your company's accounting period ends, which is three months BEFORE the return is due, and HMRC never sends a bill. You work it out (19% up to £50,000 profit, 25% over £250,000, marginal relief between), pay against your period-specific 17-character reference, then file the CT600 within 12 months. Get the order or the reference wrong and interest starts running against you while your money sits in the wrong place. This guide gives the exact sequence, dates for every common year end, and what to do if you cannot pay.
Rates are for financial year 2026, checked against HMRC guidance on 27 July 2026.
Who this applies to
| You are... | Corporation tax position |
|---|---|
| A limited company (trading) | Yes: on profits, even if you take no money out |
| A sole trader or ordinary partnership | No: you pay Income Tax via Self Assessment instead |
| A dormant company | No tax, but you must tell HMRC it is dormant or reminders and penalties follow |
| A club, co-op or unincorporated association | Usually yes, on profits |
| A company that made a loss | No payment, but the return is still mandatory, and the loss is valuable (see below) |
| A company with £1.5m+ profits | Different regime: quarterly instalments, starting during the accounting year |
Key facts and this year's deadlines
| Year end | Payment due (9m + 1 day) | CT600 due (12m) |
|---|---|---|
| 31 March 2026 | 1 January 2027 | 31 March 2027 |
| 30 June 2026 | 1 April 2027 | 30 June 2027 |
| 30 September 2026 | 1 July 2027 | 30 September 2027 |
| 31 December 2026 | 1 October 2027 | 31 December 2027 |
| Rate (FY2026) | Profit band |
|---|---|
| 19% small profits rate | Up to £50,000 |
| Marginal relief (effective 26.5% on the slice) | £50,000 to £250,000 |
| 25% main rate | Over £250,000 |
The £50,000/£250,000 limits are divided by the number of associated companies and shrink for short accounting periods: two associated companies means the 19% band ends at £25,000 each.
The exact sequence, step by step
- Period ends. Your accountant (or you) prepares accounts and computes taxable profit: broadly income minus allowable costs, salaries, employer NI and capital allowances. The profit and loss calculator gets you from turnover to profit.
- Compute the tax, including marginal relief, with the corporation tax calculator.
- Log into the HMRC business tax account and copy this period's 17-character reference (it ends with digits identifying the period; last year's is wrong for this year).
- Pay by 9 months + 1 day. Faster Payments or CHAPS if close to the deadline; Bacs and first-time Direct Debits need 3-5 working days.
- File the CT600 online within 12 months (most companies file it much earlier, with the accounts).
- Confirm in the business tax account that the payment matched the period and the balance shows zero.
Real example 1: Amina's design studio, £40,000 profit
| Item | Amount |
|---|---|
| Taxable profit (year to 31 March 2026) | £40,000 |
| Tax at 19% | £7,600.00 |
| Monthly set-aside that would have covered it | £633 a month |
| Deadline | 1 January 2027 |
Amina pays by Faster Payments on 28 December, checks the allocation on 2 January, files the CT600 in February. No interest, no letters.
Real example 2: Rob's e-commerce company, £80,000 profit (marginal relief)
| Step | Amount |
|---|---|
| Tax at main rate: £80,000 × 25% | £20,000.00 |
| Marginal relief: (£250,000 - £80,000) × 3/200 | -£2,550.00 |
| Tax due | £17,450.00 (effective 21.8%) |
The important subtlety: every pound of profit between £50,000 and £250,000 is effectively taxed at 26.5%, higher than the main rate. A £10,000 employer pension contribution made before Rob's year end would save £2,650 in corporation tax, which is why year-end planning clusters around this band. Rob models salary, dividends and pension together in the limited company tax calculator and the dividend vs salary calculator.
Real example 3: Priya's café company, a £12,000 loss
No tax to pay, but three things still matter. She must file the CT600 anyway (the £100 late-filing penalty applies even to loss-makers). She should tell HMRC "nothing due" so automated reminders stop. And the loss itself has value: carried back against last year's £15,000 profit it produces a 19% refund of £2,280 in cash, or it can roll forward against future profits. Loss-making years are exactly when the paperwork pays.
If this is you, do this (decision table)
| Situation | Meaning | Decision | Action |
|---|---|---|---|
| First year trading, no idea of the dates | First period is often two returns | Get the dates from HMRC | Business tax account shows your exact period ends and references |
| Deadline within 2 weeks, cash available | Timing risk only | Pay by Faster Payments today | Weekend-safe; keep the confirmation |
| Deadline near, cannot pay in full | Interest inevitable, penalties avoidable | Call BEFORE the deadline | HMRC Time to Pay: 0300 200 3835; instalments over months are routine for viable businesses |
| Paid but HMRC says outstanding | Wrong reference, almost always | Reallocate, do not re-pay | Call with payment date/amount; they move it to the right period |
| Profit hovering around £50,000 | Entering the 26.5% band | Plan before year end | Pension contributions and timing of costs; act before the period closes, not after |
| Made a loss | Refund or future saving available | File anyway, choose carry-back or forward | Carry-back = cash now; forward = bigger saving if profits will exceed £50k |
| Profits heading past £1.5m | Instalments regime approaching | Forecast now | Quarterly payments start DURING the year; cash-flow plan needed a year ahead |
Ways to pay, ranked by speed
| Method | Clears in | Watch out |
|---|---|---|
| Faster Payments (online banking) | Same day, incl. weekends | Bank daily limits on large sums |
| CHAPS | Same working day | Bank cut-off times, small fee |
| Corporate debit/credit card online | Same day | Fee on credit cards; personal cards not accepted |
| Bacs | 3 working days | Not for deadline week |
| Direct Debit | 3 days (5 first time) | Set up well ahead |
If the deadline falls on a weekend or bank holiday, funds must arrive by the previous working day.
Action checklist
- Write both dates (pay: 9m+1d, file: 12m) into the calendar now, with a reminder a month before each.
- Open a tax set-aside account; sweep 19-26% of profit monthly.
- Before year end, not after: review pension contributions and expense timing if profit is in the 26.5% band.
- Copy the current period's 17-character reference fresh from the business tax account before paying.
- Pay 2+ working days early, then verify allocation; only then file and relax.
- Cannot pay? Ring Time to Pay before the date; estimate the interest cost of waiting with the late payment interest calculator.
Frequently asked questions
Why is the payment due before the return?
Historic quirk, but real: payment at 9 months + 1 day, return at 12 months. In practice good accountants prepare both together well before the payment date, so the return "due date" becomes irrelevant.
What is the 17-character reference and where do I find it?
It is your corporation tax payslip reference for one specific accounting period, e.g. 1234005678A00107A: the tail identifies the period number. It is shown in your HMRC business tax account and on the payslip HMRC sends. Never reuse last year's.
What interest and penalties actually apply if I am late?
Late payment: daily interest at HMRC's late payment rate from the due date (no fixed penalty for the payment itself in the standard regime, but persistent debt attracts enforcement). Late CT600: £100 immediately, another £100 at 3 months, tax-geared penalties at 6 and 12 months, and repeated lateness escalates the fixed penalties.
Can HMRC pay ME interest?
Yes: pay earlier than the due date and HMRC credits interest from the "material date" (6 months and 13 days after the period starts) to the deadline. The rate is modest, but for cash-rich companies it is risk-free.
Do I pay corporation tax if I leave all profit in the company?
Yes. Corporation tax is on profits earned, not on money withdrawn. Dividends come afterwards, out of post-tax profit, taxed again in your hands: which is exactly why the salary/dividend/pension mix deserves modelling every year.
How do associated companies change my bill?
The £50,000 and £250,000 limits are split between associated companies (broadly, companies under common control). Two companies: limits become £25,000/£125,000 each, dragging both into higher effective rates sooner. Holding companies and spouses' companies count more often than people expect; check before assuming 19%.
Sources
- GOV.UK: Pay your Corporation Tax bill (accessed 27 July 2026)
- GOV.UK: Corporation Tax rates and reliefs (accessed 27 July 2026)
- GOV.UK: Marginal Relief (accessed 27 July 2026)
Written by
Laura Michelle Davis — Chartered Tax Adviser (CTA)
ACCA · CTA (Chartered Tax Adviser) · ATT · BSc Economics, UC Berkeley
Laura Michelle Davis is a Chartered Tax Adviser (CTA) who also holds the ACCA and ATT qualifications and a BSc in Economics from UC Berkeley. She specialises in UK personal tax, covering income tax, National Insurance, self-employment and capital gains, and has built her career making complicated rules easy to follow. At TaxFly, Laura writes and edits the tax guides and explainers, checking that figures reflect current HMRC rates and that every explanation answers the question a real person is actually asking. Her goal is plain-English clarity you can trust and act on.
