When Is Corporation Tax Due for UK Companies?

A limited company can be busy earning, quoting for work, running payroll and keeping customers happy, then suddenly find a Corporation Tax deadline is much closer than expected. So, when is corporation tax due? For most UK companies, the payment must reach HMRC nine months and one day after the end of the accounting period.

That date is different from the deadline for filing your Company Tax Return. Mixing up the two is one of the most common and costly errors small company directors make. The return is usually due later, but the tax itself still needs to be paid first.

When is Corporation Tax due?

For a standard accounting period lasting 12 months, Corporation Tax is due nine months and one day after the accounting period ends.

If your company’s year end is 31 March 2026, for example, the Corporation Tax payment deadline is 1 January 2027. Your Company Tax Return for that period is not normally due until 31 March 2027, but waiting until then to think about the tax bill can leave you short of cash.

This deadline applies whether you work in construction, run a taxi business, own a small consultancy or operate through a limited company alongside other income. What changes is the amount due, not the basic payment timetable.

Your accounting period for Corporation Tax is normally shown on HMRC correspondence and in your company tax account. It often matches your company’s financial year, but not always, particularly in the first year of trading or after a change of accounting reference date.

Payment deadline versus tax return deadline

There are two separate jobs, with two separate dates:

• Pay the Corporation Tax nine months and one day after the end of the accounting period.

• File the Company Tax Return within 12 months of the end of the accounting period.

Using the same 31 March year end example, payment is due by 1 January and the return by 31 March. In practice, it makes sense to prepare the accounts and tax calculation well before the payment date. You cannot sensibly plan for a bill until you have a reliable estimate of taxable profit.

The accounts also have their own filing deadline at Companies House, usually nine months after the financial year end for a private limited company. That can fall one day before the Corporation Tax payment deadline. Although Companies House and HMRC are separate, leaving both jobs until the last minute creates unnecessary pressure.

The deadline is based on the accounting period, not your cash flow

Corporation Tax is charged on company profits for the accounting period. HMRC does not move the deadline because a customer has paid late, work has slowed down or money has been drawn from the business for other purposes.

That is why a sensible company director treats tax as money the business is holding temporarily, rather than money available to spend. Putting aside a regular percentage of profits in a separate savings account can make the eventual payment far less painful. The right percentage depends on your profit level, expenses, capital allowances and any other tax factors, so avoid relying on a rough rule of thumb for too long.

First-year rules can catch new companies out

A company’s first set of statutory accounts can cover more than 12 months, sometimes up to 21 months. However, a Corporation Tax accounting period cannot be longer than 12 months.

If your first accounts run for, say, 15 months, HMRC will normally require two Corporation Tax returns. The first period covers 12 months and the second covers the remaining three months. Each period has its own payment deadline, calculated from its own end date.

This can feel counterintuitive. You may not have filed accounts yet, but an earlier Corporation Tax payment can still be due. New limited companies should check their dates as soon as they start trading rather than assuming all tax obligations follow the first Companies House accounts deadline.

A shortened accounting period can also arise if you change your company year end, cease trading or prepare accounts following a restructure. It is worth checking every time something changes, especially where the business has had a profitable year.

Large companies may pay Corporation Tax in instalments

Most small and owner-managed companies pay in one amount under the nine-month-and-one-day rule. Larger companies can be required to pay Corporation Tax by quarterly instalments instead.

Broadly, the instalment regime can apply where taxable profits exceed £1.5 million, although the threshold is reduced where companies are associated with one another. Very large companies, generally those with taxable profits above £20 million subject to similar adjustments, have earlier instalment timings.

For a typical small trade business, landlord company or contractor limited company, these thresholds will not apply. But groups of companies and businesses growing quickly should not assume they can wait until nine months after year end. An accountant can assess this early, when there is still time to plan cash flow properly.

How to work out what you need to pay

Corporation Tax is not simply your bank balance multiplied by a tax rate. The starting point is the company’s accounting profit, then adjustments are made for items that are treated differently for tax.

Some expenses may not be allowable, while qualifying equipment, vehicles or plant may attract capital allowances. Directors’ salaries, pension contributions, use of home costs, business mileage, entertaining and repairs can all need careful treatment. If your company has rental income, CIS deductions, losses brought forward or more than one income stream, the calculation may need additional attention.

The main rate and small profits rate can also vary according to taxable profits and associated companies. For this reason, it is better to get a current calculation than to assume last year’s percentage will produce the right answer.

For day-to-day control, keep bookkeeping up to date. If your records are several months behind, you cannot see the likely tax position until the pressure is already building. Regular bookkeeping gives you time to make legitimate decisions before the year end, such as reviewing pension contributions, capital expenditure or outstanding allowable costs.

Paying HMRC on time

Corporation Tax is normally paid electronically. HMRC needs cleared funds by the deadline, so do not leave a bank transfer until the final evening. Different payment methods have different processing times, particularly around weekends and bank holidays.

Use the correct Corporation Tax payment reference, which is normally your 17-character Unique Taxpayer Reference followed by the accounting period digits. This tells HMRC which period the payment relates to. Using an incorrect reference can mean the payment is not allocated properly, even if the money has left your account.

Once payment has been made, keep confirmation with your tax records. It is a small administrative step, but useful if there is any later query over timing or allocation.

What happens if you pay late?

HMRC charges late payment interest from the day after the payment deadline until the tax is paid. Interest rates can change, so the cost will depend on how late the payment is and the rate applying at the time.

Late filing is dealt with separately. A Company Tax Return filed after its deadline can attract penalties, beginning at £100. Further penalties apply if the delay continues, and repeated late filing can increase the charge. In more serious cases, HMRC may estimate the tax due before you submit an accurate return.

If you know your company cannot pay on time, do not ignore HMRC letters or wait for enforcement action. Contact HMRC promptly to discuss the position. A Time to Pay arrangement may be possible in suitable circumstances, but it is not automatic and interest will usually continue. You will need a realistic payment proposal based on the business’s actual cash flow.

A practical routine for limited company directors

The easiest way to avoid surprises is to make Corporation Tax part of your regular business routine, rather than an annual emergency. Reconcile the bookkeeping monthly or quarterly, review profit and likely tax, and set funds aside as income is received.

Around three months before the company year end, review the likely result and any planned purchases, pension contributions or changes to salary and dividends. The aim is not to spend money simply to reduce tax. It is to make informed business decisions while they can still affect the period.

After the year end, get the accounts and Corporation Tax calculation underway promptly. This gives you a firm figure, a clear payment date and time to deal with any questions before the deadline arrives. For directors balancing jobs, subcontractors, property income or payroll, that certainty is often more valuable than a last-minute scramble.

Corporation Tax deadlines are manageable once the dates are clear and the records are current. If the figures are unclear or your first accounting period is unusual, getting practical advice early can protect both your cash flow and your peace of mind.