Payment of corporation tax

Produced by Tolley

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Payment of corporation tax
  • Normal due date
  • Quarterly instalment payments
  • Time to pay
  • Security deposits
  • Making payment
  • Methods of making electronic payment
  • Corporation tax reference number
  • Payment by Direct Debit
  • Payment by BACS, CHAPS or faster payments
  • More...

Payment of corporation tax

Normal due date

Most companies are required to pay all of their corporation tax nine months and one day after the end of the chargeable accounting period. For example, where a chargeable accounting period ends on 31 December 2020, the due and payable date for corporation tax is 1 October 2021.

If a company’s accounting period is more than 12 months long, then the period is split into two periods for the purpose of calculating the tax payable. The first period will be the first 12 months and the second period is the balance.

See Example 1.

Quarterly instalment payments

Large and very large companies are required to pay their tax by instalments.

Large companies are defined as those which have profits in excess of £1,500,000 and very large companies as those which have profits in excess of £20,000,000.

For additional information on quarterly instalment payments, see the QIPs ― when do they apply? and Calculating QIPs guidance notes.

Time to pay

In certain circumstances, HMRC will agree a ‘time to pay’ arrangement with a taxpayer who is in difficulty in meeting tax payment deadlines. The idea is to help taxpayers with their cash flow by allowing them to spread their income or corporation tax payments equally over a period straddling the normal due dates. See the Time to pay arrangements for tax due under self assessment guidance note.

See also HMRC: If you can’t pay your tax bill on time for guidance and HMRC: Payment problems for telephone numbers.

Security deposits

HMRC has the power to require high-risk businesses

Popular documents