Corporation Tax deadlines: when to pay and file your return

Running a limited company comes with many dates to remember. But if you get your Corporation Tax deadlines wrong, it costs you money immediately.

Most business taxes – VAT, for example, or Self Assessment – tie the payment deadline and the filing deadline together. Corporation Tax doesn’t. The deadline to pay your tax and the deadline to file your return are two separate dates. One comes several months before the other. This catches more directors out than you’d expect.

To help you avoid this mistake, we explain exactly how the dual deadlines work. We also look at what the penalties are if you miss either date, and how to make sure it never becomes a problem.

The two key dates you must know

1. The payment deadline: 9 Months and 1 day

For most small and medium-sized companies, Corporation Tax must be paid to HMRC 9 months and 1 day after the end of your accounting period.

So if your company’s year-end is 31st March, your Corporation Tax payment is due by 1st January the following year. Not when you file, nor when your accounts are signed off, but 1st January.

This deadline falls whether or not your tax return has been prepared. HMRC expects payment based on your liability, and if your accountant hasn’t yet calculated that figure, you still need to pay an accurate estimate and reconcile it later. (You might also want to change your accountant!)

2. The filing deadline: 12 months after your year-end

You have 12 months from the end of your accounting period to file your CT600 (your Company Tax Return) with HMRC.

Using the same example: a 31st March year-end means your CT600 filing deadline is 31st March the following year.

You’ll note that this is three months after the payment was due. This is the trap. Many directors don’t think about their Corporation Tax until they’re approaching the filing deadline – by which point they’ve already missed the payment deadline and interest is quietly racking up.

What happens if you miss the Corporation Tax deadlines?

Late filing penalties

HMRC applies automatic penalties for late CT600 filings. They get larger the longer you delay:

• 1 day late: £100 automatic penalty
• 3 months late: Another £100
• 6 months late: HMRC makes its own estimate of your tax bill (a ‘determination’) and charges 10% of any unpaid tax on top
• 12 months late: A further 10% of unpaid tax

Worse still, if your Corporation Tax Return is late three times in a row, the £100 penalties increase to £500 each.

It’s a very good idea to do all you can to avoid a determination. Once HMRC raises one, you can’t simply make it disappear by filing late. You’ll usually need to take extra steps to get HMRC’s estimate corrected, which takes time and creates hassle you really don’t need.

Late payment interest

There’s no fixed fine for paying your Corporation Tax late, but HMRC charges interest from the day after the payment was due (current HMRC interest rates are here). Interest rates have been relatively high in recent years, and crucially, the clock starts ticking immediately – there’s no grace period.

The longer the delay, the more the interest accumulates. Even a few weeks can add a meaningful sum to your liability, particularly if you have a growing businesses with larger tax bills.

A note for larger companies

If your company’s taxable profits exceed £1.5 million, the rules above don’t fully apply to you. Large companies are required to pay Corporation Tax in quarterly instalments – two of which fall during the accounting period itself, before the year has even ended. In practice, the threshold can be affected by “associated companies”, so groups (and businesses with connected companies) can be pulled into instalments sooner than expected. If your profits are approaching this threshold, speak to your accountant about whether the instalment regime applies. Very large companies (broadly, those above £20 million) follow a separate instalment regime.

How to pay Corporation Tax

HMRC accepts Corporation Tax payments by bank transfer (Faster Payments), Bacs, Direct Debit, or online by business debit / corporate credit card. If you’re paying by Bacs, allow at least three working days for the payment to clear – paying on the deadline date itself via Bacs is not the same as paying on time.

One thing to be aware of: HMRC does not accept payments made with a personal credit card. Payment options can change, so it’s worth checking the current accepted methods before you pay.

Stop worrying about Corporation Tax deadlines – let us watch the clock

It’s very easy to let Corporation Tax deadlines slip your mind. Between running a business, managing staff, chasing invoices and everything else on your plate, tax dates slip. And when they do, HMRC doesn’t send a reminder – it sends a penalty notice.

THP’s Corporation Tax Services mean both the payment and filing deadlines are built into your calendar from the moment your year-end closes. We calculate your liability, prepare your CT600, and make sure everything reaches HMRC on time – so you’re never guessing or cutting it fine.

If you’d like us to take Corporation Tax off your to-do list entirely, get in touch with the THP team today. We’d be delighted to help you and talk you through any other services that may be of benefit to your business.