Corporation Tax Payment Details 2026

A Corporation Tax payment must be linked to the correct company and accounting period. Using the right HMRC account but entering an outdated payment reference can delay allocation and leave the company’s statement showing an unpaid balance. The payment method must also provide enough processing time before the deadline. These checks matter whether the company pays directly or an accountant prepares the calculation.

Most companies can pay electronically using online banking, Direct Debit, Faster Payments, CHAPS, Bacs or an eligible card. The correct option depends on the amount, the time remaining and whether a Direct Debit has already been authorised. Every transaction should be supported by a current tax calculation and a 17-character Corporation Tax payment reference. The confirmation should then be retained with the records for that accounting period.

This article focuses on Corporation Tax payment details, allocation and verification rather than repeating general guidance about company tax deadlines. It explains how to identify the correct reference, prevent payments being placed against the wrong period and confirm that HMRC has received the money. It also separates the payment deadline from the CT600 filing deadline. Both obligations must be managed even though they fall on different dates.

What Is Corporation Tax?

According to GOV.UK Corporation Tax guidance, taxable profits can include trading profits, investment income and chargeable gains from selling assets. A UK-resident company is generally charged on relevant profits from the UK and overseas. An overseas company with a UK branch or office may be charged on profits from its UK activities. Allowances, reliefs, losses and deductible business expenses can alter the final liability.

Corporation Tax is based on taxable profit rather than turnover or the accounting profit shown before tax adjustments. Certain expenses included in the accounts may not be allowable for tax, while capital allowances or loss relief may reduce the taxable amount. The company must prepare a tax computation supporting the figure reported in its Company Tax Return. That calculation determines the Corporation Tax payment required for the accounting period.

HMRC does not normally send companies a bill telling them exactly how much Corporation Tax to pay. The responsibility rests with the company to keep records, calculate the liability, pay it on time and submit the return. An accountant can manage parts of this work, but the company and its directors remain responsible for compliance. Payment should be based on a reviewed calculation rather than a rough percentage of money in the bank.

Who Has to Pay Corporation Tax?

Private and public limited companies are the most common Corporation Tax payers. Certain overseas companies, clubs, co-operatives and unincorporated associations can also fall within the system. The legal form, residence position and activities determine whether a liability arises. Sole traders normally pay Income Tax and National Insurance through Self Assessment instead of Corporation Tax.

A newly incorporated company can usually add Corporation Tax services when it registers or through its business tax account. Once the account is active, the company can check accounting periods, statements and payment details online. A company that has not started trading may be dormant for Corporation Tax. Dormancy should be reported correctly rather than inferred from the absence of sales.

According to GOV.UK dormant-company guidance, a company that has stopped trading and has no other income can tell HMRC it is dormant. If HMRC has already issued a notice to deliver a Company Tax Return, the company may still need to file for the specified period. Companies House obligations can also continue during dormancy. The company should therefore deal separately with its HMRC and Companies House requirements.

How to Make a Corporation Tax Payment

Begin with the tax computation for the correct accounting period. Confirm that taxable profits, allowable expenses, capital allowances, losses and reliefs have been treated appropriately. The Corporation Tax calculator can provide an initial estimate. The actual payment should still agree with the company’s completed or carefully estimated tax computation.

Next, find the 17-character payment reference for the accounting period being paid. This appears on HMRC’s notice to deliver the Company Tax Return, payment reminders or the company’s online Corporation Tax statement. Do not use the 10-digit UTR by itself. Do not assume that the reference used for the previous year remains valid.

Open the official GOV.UK Corporation Tax payment service and choose a method that can clear before the due date. Review the amount, company details and payment reference before authorising the transaction. Save the bank or card confirmation with the accounting records. Check the HMRC statement after processing to ensure the payment reached the intended accounting period.

Corporation Tax Payment Details

The payment reference is the most important identifying detail. HMRC uses it to match the money with the company and accounting period. According to HMRC card-payment guidance, the 17-character reference changes for each accounting period. A payment can be delayed when the wrong reference is entered.

The company UTR and payment reference serve different purposes. The UTR is a 10-digit identifier allocated to the company for Corporation Tax. The payment reference is longer and includes information linking the transaction to a particular period. Use the full reference displayed by HMRC instead of attempting to recreate it from memory.

The reference can be found in the company’s HMRC online account by viewing the Corporation Tax statement, selecting accounting periods and opening the period being paid. It may also be printed on a notice to deliver a return or an HMRC reminder. If the payment is for a penalty, use the reference for the accounting period to which the penalty relates unless HMRC instructs otherwise. Keep the relevant notice with the payment evidence.

Bank details should always be taken from the current GOV.UK payment service or the company’s official HMRC correspondence. Do not hardcode HMRC account numbers into internal instructions that may remain in use for years. A saved bank payee can retain both old bank information and the previous period’s reference. Check both before releasing every payment.

Corporation Tax Payment Deadlines

At the time of writing, companies outside the quarterly-instalment regime normally pay nine months and one day after the end of their Corporation Tax accounting period. A company with a year end of 31 March 2026 would therefore normally pay by 1 January 2027. A company with a year end of 30 June 2026 would normally pay by 1 April 2027. Always check GOV.UK for current payment deadlines.

The accounting period is the period covered by the Company Tax Return and cannot normally exceed 12 months. First accounts can cover more than 12 months, creating two Corporation Tax accounting periods and potentially two payment deadlines. A shortened or extended financial year can also affect the dates. Check the periods shown in the HMRC business tax account before calculating the deadline.

The existing guide to when Corporation Tax is due covers accounting-period deadlines in greater detail. For payment control, record the statutory due date and an earlier internal approval date. The internal date should allow enough time to finalise the tax estimate and correct any banking problem. Waiting until the statutory deadline leaves little room for rejected transactions.

Companies with sufficiently high profits may have to pay through quarterly instalments. The applicable thresholds can be reduced by associated companies and adjusted for short accounting periods. Very large companies follow an earlier instalment schedule. Businesses approaching these limits should confirm their position before relying on the standard nine-month-and-one-day rule.

Online Corporation Tax Payments

HMRC offers several electronic routes rather than one mandatory payment portal. A company can approve a payment through a compatible online bank account or use its bank’s Faster Payments, CHAPS or Bacs service. Direct Debit and eligible card payments are also available. The official GOV.UK service explains the current options and their processing times.

Faster Payments normally reaches HMRC on the same or next day, including weekends and bank holidays. CHAPS normally arrives on the same working day when the transaction is made within the bank’s cut-off time. Bacs normally requires three working days. Bank limits and additional authorisation requirements can affect how quickly a large payment is released.

An existing Direct Debit normally requires three working days. HMRC advises allowing five working days when setting one up for the first time. A Direct Debit cannot be used for a payment above £20 million under current guidance. A company that has not used its instruction for two years or more should check whether it remains active.

The HMRC online payment guide explains general online tax-payment controls. Corporation Tax requires the additional check that the reference belongs to the correct accounting period. Entering the company’s UTR or an old 17-character reference can cause allocation problems. Confirm the reference immediately before authorising the payment.

Payment Methods Accepted by HMRC

Faster Payments can be suitable where the deadline is close, provided the bank supports the amount and transaction. CHAPS can be used for same-working-day payments but may involve a bank fee. Bacs is slower and requires advance planning. The company should choose the method based on the time remaining and the payment value.

HMRC accepts online card payments using personal debit cards and eligible corporate cards. According to current guidance, no fee applies to a personal debit card. A non-refundable fee applies to corporate debit and corporate credit cards. Personal credit cards are not accepted for Corporation Tax.

HMRC treats an accepted card payment as made on the date it is submitted, including weekends and bank holidays. Card limits and security checks can still prevent a transaction from completing. If the full bill cannot be paid by card, HMRC directs the payer to use another method. Do not divide a payment solely to avoid a provider limit without checking that every transaction is completed and referenced correctly.

Branch payment by cash or cheque is only available where the payer has an HMRC paying-in slip. Corporation Tax cannot be paid by post. Electronic methods usually provide clearer evidence and faster confirmation. Retain any branch-stamped receipt until the amount appears on the company’s HMRC statement.

How to Calculate Corporation Tax Before Payment

Start with the company accounts and adjust the accounting result for tax purposes. Expenses must be reviewed to determine whether they are deductible, while qualifying capital expenditure may attract capital allowances rather than a normal expense deduction. Chargeable gains, investment income and losses can also affect taxable profits. The final computation should reconcile clearly with the CT600 figures.

At the time of writing, the main Corporation Tax rate for financial year 2026 to 2027 is 25%, while the small-profits rate is 19%. Marginal relief can generally apply between the £50,000 and £250,000 profit thresholds. Associated companies and short accounting periods can reduce those thresholds. Always check GOV.UK for current rates and marginal-relief rules.

A company should not automatically multiply its accounting profit by 19% or 25%. Disallowable expenses, taxable gains and tax reliefs can make that estimate inaccurate. The applicable rate may also change when an accounting period crosses a financial-year boundary. Use an apportioned calculation where required.

Payment may be due before the CT600 filing deadline, which means the final return might not yet be complete. The company should prepare a sufficiently reliable estimate using current accounts and known tax adjustments. If later work shows an underpayment, pay the difference promptly to limit interest. If the estimate was too high, the resulting credit may be repaid or reallocated after HMRC has enough information.

Checking Payment Allocation

A bank confirmation proves that the transaction left the company’s account, but it does not prove that HMRC allocated it correctly. According to GOV.UK payment-check guidance, the company’s online account should update within a few days after HMRC receives the payment. Review the Corporation Tax statement after that period. Match the payment date and amount to the correct accounting period.

If the payment is missing, first check the bank statement, transaction status and reference used. A pending or rejected transaction must be addressed with the bank. If the money reached HMRC using the wrong reference, contact HMRC with the company UTR, payment amount, transaction date, bank reference and intended accounting period. Keep the evidence available until the correction appears online.

A payment made against the wrong period may leave one period showing a credit and another showing an outstanding liability. Interest can continue against the unpaid period until the allocation is corrected according to HMRC’s rules. Do not assume that the total balance across the account protects the company automatically. Request clarification or reallocation promptly.

Corporation Tax Overpayments

Overpayments can arise from an excessive estimate, duplicate transaction, amended tax calculation or relief claimed after the original payment. According to GOV.UK Corporation Tax refund guidance, the Company Tax Return can tell HMRC that a repayment is due and provide instructions for receiving it. Including current company bank details can help HMRC process an electronic refund. HMRC may first use the credit against other tax debts.

HMRC may pay interest where Corporation Tax is paid early or overpaid. At the time of writing, the repayment interest rate is 2.75%, but rates can change. Interest paid to the company is taxable and should be included as income in the relevant Company Tax Return. Always check GOV.UK for the current repayment-interest rate.

Do not request a refund until the company has confirmed why the credit exists. The amount may be needed for another accounting period, an amended return or an outstanding HMRC charge. Compare the tax computations, payment history and online statement. Keep a clear reconciliation showing how the requested repayment was calculated.

Late Corporation Tax Payments

HMRC charges late-payment interest where Corporation Tax is paid late, underpaid or not paid. Interest normally runs from the day after the due date to the payment date and is calculated daily. It is automatic, although HMRC does not charge interest on the interest itself. The company should pay an identified shortfall promptly rather than waiting for a demand.

At the time of writing, the Corporation Tax Self Assessment late-payment interest rate applying from 9 January 2026 is 7.75%. This rate can change in response to the Bank of England base rate. Always check GOV.UK for current interest rates. Avoid hardcoding the percentage into long-term payment procedures.

Late payment and late filing are separate compliance failures. Ordinary late Corporation Tax payment normally creates interest, while penalties can arise from late returns, inaccurate returns, failure to notify or deliberate failures involving instalment payments. Do not describe every late Corporation Tax payment as carrying an automatic flat penalty. Check the charge shown by HMRC and the rule under which it was issued.

If the company cannot pay in full, contact HMRC as soon as possible. Payment support may include a Time to Pay arrangement based on affordability and the company’s circumstances. Interest generally continues while tax remains outstanding. Ignoring correspondence can lead to debt recovery and stronger enforcement action.

Company Tax Return vs Corporation Tax Payment

For most companies outside the instalment regime, Corporation Tax is normally payable nine months and one day after the accounting period ends. The Company Tax Return is normally due 12 months after the period ends. This creates a gap of almost three months between payment and filing. Waiting until the CT600 deadline to pay can therefore result in interest.

The CT600 submission normally includes the Company Tax Return, tax computation and company accounts in the required electronic format. Making the payment does not send these documents to HMRC. Filing the return does not automatically transfer money from the company’s bank account. Both tasks require separate confirmation.

A company with no tax to pay may still have to file a return if HMRC issued a notice to deliver one. HMRC also provides a process for reporting that no Corporation Tax payment is due. Do not leave the account unresolved simply because the calculation shows nil tax. Check that the filing and payment records both reflect the correct position.

Maintain separate internal deadlines for completing accounts, approving the tax estimate, paying Corporation Tax and filing the CT600. Record the person responsible for each stage. Where an accountant handles submission, confirm whether the company or accountant will initiate payment. This prevents both parties from assuming the other has paid.

Payments for Groups of Companies

HMRC offers optional Group Payment Arrangements for qualifying groups. Under the arrangement, a nominated company makes payments covering participating companies. According to HMRC group-payment guidance, the arrangement requires a legal agreement and must meet specific conditions. A company cannot join more than one arrangement for the same accounting period.

A group arrangement can reduce the administration involved in making numerous separate instalment payments. It may also help manage interest where group estimates create overpayments and underpayments. However, nomination does not remove each company’s underlying liability or compliance responsibilities. Accurate company-level calculations are still required.

Do not make one informal payment for several companies using a single company’s ordinary reference. Where no formal Group Payment Arrangement exists, follow HMRC’s specific procedure for multiple or group payments. Keep a schedule showing every company, UTR, accounting period and amount included. Reconcile the group payment after HMRC has allocated it.

Common Corporation Tax Payment Mistakes

A saved HMRC bank payee may contain the 17-character reference used for the previous accounting period. The bank can preserve that reference automatically even though HMRC changes it each period. Replace it with the current reference before authorising the payment. Compare all 17 characters with the HMRC statement.

Another mistake is using the 10-digit Corporation Tax UTR as the complete payment reference. The UTR identifies the company but does not provide the full period-specific detail required for the payment. Copy the 17-character reference from the relevant HMRC source. Do not add characters based on an example belonging to another company.

Companies can also underpay by applying a headline rate directly to accounting profit. Tax adjustments, associated companies, marginal relief and changes across financial years can alter the calculation. Prepare a proper tax computation before payment. If an estimate is necessary, document its assumptions and review it before the deadline.

Confusing the payment and filing deadlines is another costly error. The payment usually falls nine months and one day after the accounting period, while the CT600 normally follows at 12 months. Add both dates to the compliance calendar. Use an earlier internal payment date to allow for approval and bank processing.

Finally, companies sometimes archive the bank receipt without checking HMRC’s statement. A wrong reference can leave the money unallocated or attached to an earlier period. Check the online account within a few days and investigate discrepancies promptly. Keep the case open internally until the intended accounting period shows the payment.

Final Thoughts

Corporation Tax payment control should begin before the bank transaction. Confirm the accounting period, liability, deadline, approved payment route and reference. Review every field before releasing the money and retain the confirmation with the tax computation. These steps reduce the risk of preventable interest and allocation problems.

After payment, check the HMRC Corporation Tax statement rather than relying only on the bank record. Investigate a missing payment, unexpected credit or remaining balance promptly. If the company overpaid, reconcile the account before requesting a refund. If the company cannot pay, contact HMRC early to discuss the available support.

This guide provides general information about Corporation Tax payments for 2026/27. Individual company circumstances vary. For personalised advice, consult a qualified tax adviser or contact HMRC directly. Always check GOV.UK for current payment methods, deadlines, interest rates and guidance.