How to Pay Corporation Tax in 2025: Deadlines, Payment Methods & Step-By-Step Guide

Missing your corporation tax payment deadline can trigger fines and interest. But the process itself is much simpler than most business owners expect — as long as you understand when the payment is due and how HMRC expects you to pay.

This guide breaks everything down into plain language, with examples for small businesses, growing companies, and large corporations using quarterly instalments.

What Is Corporation Tax and Who Pays It?

Corporation Tax is a tax on the profits of:

• Limited companies (Ltd)
• Foreign companies with a UK branch
• Clubs, societies, and associations
• Some non-profits (if they trade)

The current rate in 2025 depends on your profits:

Important: You must pay corporation tax before you file your Company Tax Return (CT600). This confuses many first-time directors.

When Is Corporation Tax Due?

The deadline depends on your size and profit level.

Small and Medium Companies (most UK businesses)

Due: 9 months and 1 day after the end of your accounting period.

If your accounting year ends on 31 March 2025
Your payment deadline is: 1 January 2026

✔ This applies if your profits are below the large company threshold (£1.5m+ adjusted for associated companies).
✔ Over 90% of UK companies fall into this category.

Large Companies – Quarterly Instalments

If your company has high profits (usually £1.5m+), you must pay in four instalments:

• Instalment 1: 6 months + 13 days into your period
• Instalment 2: 3 months later
• Instalment 3: 3 months later
• Instalment 4: 3 months later

This system is designed for cash-rich companies so HMRC receives payments throughout the year, not at the end. Below is the simplest way to calculate your deadline:

This is for small and medium companies only — not quarterly payers.

How to Pay Corporation Tax (Step-by-Step)

HMRC gives you several ways to pay, but the processing time varies. Here’s the safest order:

Step 1 — Log in to HMRC Business Tax Account

You’ll need your:

• Government Gateway ID
• Company UTR
• Corporation tax reference (17-character payment reference)

If you don’t know these, check:

• Your HMRC letters
• Companies House documents
• Your accountant’s records

Step 2 — Choose Your Payment Method

Fastest options (same or next day)

Slower options (3–5 days)

For most businesses, Faster Payments is the safest and most predictable option.

Step 3 — Use the Correct Payment Reference

Your Corporation Tax payment reference is a 17-character code, usually:

1234567890A00101A (example)

This links your payment to a specific accounting period.
If you enter it incorrectly, HMRC may treat your payment as late.

You can find it in your HMRC business tax account under:

Corporation Tax → View Accounting Period → Make a Payment

Step 4 — Make the Payment

Send your payment to HMRC’s Corporation Tax account:

Sort code: 08 32 10
Account number: 12001039
Account name: HMRC Cumbernauld

Double-check the reference before confirming.

Step 5 — Keep Proof of Payment

Keep screenshots or bank statements showing:

• Amount
• Date
• Reference used

If HMRC mistakenly issues a penalty, this is what resolves it fastest.

Common Mistakes Businesses Make

Here are the errors that trigger penalties and interest most often:

❌ Paying on the filing deadline (wrong!)

Your CT600 filing deadline is 12 months after year-end.
Your tax payment is 9 months + 1 day.
These are not the same date.

❌ Using the wrong payment reference

This causes instant “late payment” flags.

❌ Missing bank processing times

BACS takes 3 days.
Direct Debit (first time) takes 5 days.

❌ Assuming your accountant pays automatically

Accountants calculate tax.
They do not pay HMRC unless you specifically arrange it.

What Happens if You Pay Corporation Tax Late?

HMRC charges:

• Interest from the day after the deadline
• Possible penalties if repeated or deliberate
• Additional checks into your accounts if lateness becomes a pattern

Even paying one day late results in interest.

If cash flow is an issue, you can request a Time to Pay arrangement, which spreads payments out.

Corporation Tax Checklist (Copy-and-Paste)

• ✔ Know your accounting year-end
• ✔ Add your payment deadline (9 months + 1 day)
• ✔ Log in to HMRC business account
• ✔ Use your 17-character reference
• ✔ Pay via Faster Payments
• ✔ Keep proof of payment
• ✔ File your CT600 before its own deadline

FAQs

Q1. Do I need to file before I pay corporation tax?

No. You pay corporation tax before you file your Company Tax Return (CT600).
HMRC requires payment 9 months and 1 day after your accounting period ends, while your CT600 filing deadline is 12 months after year-end.

Q2. Can HMRC refund corporation tax overpayments?

Yes. HMRC refunds corporation tax overpayments, usually within 2–4 weeks.
Refunds are sent to your bank account or credited to your corporation tax account.

Q3. Do dormant companies pay corporation tax?

No. Dormant companies do not pay corporation tax.
However, you must tell HMRC your company is dormant so they stop sending payment notices.

Q4. Can I pay corporation tax early?

Yes. You can pay corporation tax early.
HMRC will automatically adjust for interest if your early payment results in overpayment.

Q5. Do I need to pay corporation tax if I made no profit?

No. If your company made no profit, you do not pay corporation tax.
But you must still file a Company Tax Return showing £0 owed.

Final Words

Corporate tax isn’t complicated once you understand two things:

1. When your deadline is
2. How to submit the payment correctly

If you follow the steps and avoid processing-time mistakes, you’ll stay compliant, avoid penalties, and keep HMRC off your back.

Related: Find My National Insurance Number: Fast, Free, and Official Ways to Get It in 2025