How to Pay Corporation Tax to HMRC: 5 Payment Methods, Rates, and Key Deadlines

Corporation Tax is paid to HMRC on a company's taxable profits. The payment deadline is 9 months and 1 day after the accounting period ends. There are 5 accepted payment methods, including bank transfer, Direct Debit, and debit card.

What Is Corporation Tax?

Corporation Tax is a tax on the taxable profits of UK limited companies and certain organisations. According to HMRC, companies must register, calculate their liability, file a Company Tax Return (CT600), and pay any tax owed - even when the company made a loss.

Organisations that pay Corporation Tax include:

• Limited companies
• Foreign companies with a UK branch or office
• Clubs, co-operatives, and membership organisations
• Housing associations

Who Is Responsible for Paying Corporation Tax?

The company director or an appointed tax agent is responsible for registering, filing, and paying Corporation Tax. HMRC does not send a bill. Companies must calculate and pay the amount owed independently.

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How Do You Register for Corporation Tax with HMRC?

Register for Corporation Tax online through HMRC's Government Gateway within 3 months of starting a business. HMRC assigns a Unique Taxpayer Reference (UTR) after registration, typically within 14 days by post.

What Is a UTR Number for Corporation Tax?

A UTR (Unique Taxpayer Reference) is a 10-digit number HMRC uses to identify your company for tax purposes. It forms the basis of your 17-character payment reference, which is required to link each payment to the correct accounting period. Find your UTR in your HMRC online account or on any HMRC correspondence.

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What Are the Current Corporation Tax Rates?

The Corporation Tax rate depends on annual taxable profits. For the 2026/27 financial year, the main rate is 25% for profits over £250,000, while the small profits rate is 19% for profits under £50,000.

Profit Level

Tax Rate

Up to £50,000

19% - Small Profits Rate

£50,001 to £250,000

19% to 25% - Marginal Relief applies

Over £250,000

25% - Main Rate

What Is Marginal Relief on Corporation Tax?

Marginal Relief reduces Corporation Tax for companies with profits between £50,000 and £250,000. HMRC's Marginal Relief calculator on gov.uk calculates the exact reduction based on profit level and accounting period length.

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What Expenses Reduce Your Corporation Tax Bill?

Companies can claim allowable deductions to reduce taxable profits before applying the Corporation Tax rate. HMRC permits deductions for qualifying business expenses. These include:

• Employee salaries and employer pension contributions
• Office rent, utilities, and business insurance
• Travel and subsistence expenses
• Professional fees, including accountancy and legal costs
• Capital allowances on qualifying equipment and machinery

HMRC's Annual Investment Allowance (AIA) permits 100% first-year deductions on qualifying plant and machinery, up to £1 million per accounting period. R&D Tax Credits reduce Corporation Tax further for companies investing in qualifying innovation activities.

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When Is Corporation Tax Due?

Corporation Tax is due 9 months and 1 day after the accounting period ends. This deadline is fixed regardless of whether the company tax return has been filed. For a company with a 31 March year-end, the payment deadline is 1 January the following year.

Corporation Tax deadlines do not move if they fall on weekends or bank holidays. Payment must reach HMRC by the deadline regardless.

When Do Large Companies Pay Corporation Tax?

Companies with profits over £1.5 million must pay Corporation Tax in quarterly installments, starting 6 months and 13 days into the accounting period. Each installment covers 25% of the estimated annual liability.

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What Are the 5 Methods to Pay Corporation Tax to HMRC?

There are 5 methods to pay Corporation Tax to HMRC. Each payment must include the correct 17-character payment reference to ensure HMRC links the payment to the right accounting period.

1. Faster Payments (online banking): Transfer directly to HMRC's bank account. Sort code: 08-32-10. Account number: 12001039 (HMRC Cumbernauld) or 12001020 (HMRC Shipley). Processing time: same day.

2. CHAPS: Available through most UK banks. Processing time: same day if sent before the bank's daily cutoff. Suitable for large single payments.

3. BACS: Standard bank transfer to HMRC's account using the same bank details above. Processing time: 3 working days. Schedule in advance to clear before the deadline.

4. Direct Debit: Set up through your HMRC Business Tax Account. A new Direct Debit takes 5 working days to set up. Existing Direct Debits process within 3 working days.

5. Debit card via gov.uk: Pay at gov.uk/pay-corporation-tax-bill. Personal credit cards are not accepted for Corporation Tax payments. Personal debit cards are accepted with no fee. Processing time: 3 working days.

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What Is a Corporation Tax Payment Reference?

Every accounting period requires a unique 17-character payment reference to ensure HMRC allocates funds correctly. It consists of your 10-digit UTR followed by a 7-character period code. Using an incorrect reference means HMRC cannot match the payment and may record the liability as unpaid.

Where Do You Find Your Corporation Tax Payment Reference?

Your payment reference is available in your HMRC Business Tax Account under the Corporation Tax section. It is also printed on HMRC letters related to your company's tax account. Generate a new reference for each accounting period, as it changes with every period.

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How Do You File a Company Tax Return (CT600)?

The Company Tax Return (CT600) must be submitted within 12 months of the accounting period ending. This means, for many companies, the tax payment falls due before the return is filed. File online using HMRC's Corporation Tax service or approved commercial software.

What Are the Penalties for Late CT600 Filing?

HMRC charges a £100 penalty for returns filed up to 3 months late. The penalty rises to £200 for returns filed more than 3 months late. A further tax-based penalty applies if the return is 18 months or more overdue.

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What Happens If You Pay Corporation Tax Late?

Late payment interest accrues from the day after the deadline at the Bank of England base rate plus 2.5%. As of 2025, this is approximately 7.25% per year. A £10,000 bill paid 30 days late costs approximately £60 in interest.

What Is a Time to Pay Arrangement with HMRC?

If you cannot pay, call HMRC's Payment Support Service on 0300 200 3835 before the deadline. HMRC may agree a Time to Pay arrangement, allowing payments spread over up to 12 months. Interest continues to accrue on the outstanding balance during the arrangement.

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Corporation Tax Payment Methods Compared

The table below compares the 5 payment methods by processing time and primary requirement.

Payment Method

Processing Time

Key Requirement

Faster Payments

Same day

HMRC bank details and payment reference

CHAPS

Same day

Bank must support CHAPS transfers

BACS

3 working days

Advance scheduling required

Direct Debit

3-5 working days

HMRC Business Tax Account setup

Debit card (gov.uk)

3 working days

Personal or business debit card

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What Is the Step-by-Step Process for Paying Corporation Tax?

There are 6 steps to pay Corporation Tax correctly to HMRC:

1. Register with HMRC within 3 months of starting a business and obtain your UTR.

2. Calculate your taxable profits for the accounting period.

3. Apply the correct rate - 19%, Marginal Relief, or 25% - based on profit level.

4. Generate your 17-character payment reference from your HMRC Business Tax Account.

5. Transfer payment to HMRC using one of the 5 accepted methods before the 9-month-and-1-day deadline.

6. File the CT600 within 12 months of the accounting period end.

Use Faster Payments or CHAPS for same-day processing. Allow at least 3 working days for BACS, Direct Debit, and debit card payments to clear before the deadline.