- Corporation tax is due 9 months and 1 day after your accounting period ends, which falls before the filing deadline.
- The 2026/27 rates are 25% above £250,000, 19% at £50,000 or below, and marginal relief in between.
- HMRC charges late payment interest at 7.75% from 9 January 2026, accruing daily until the balance is cleared.
Knowing how to pay corporation tax comes down to two things: paying the right amount, and paying it by the deadline that catches most directors out. You pay corporation tax to HMRC electronically, 9 months and 1 day after your accounting period ends. That deadline lands before your tax return is even due, which surprises a lot of people.
For 2026/27, you’ll pay 25% on profits over £250,000, 19% on profits of £50,000 or less, and a tapered rate in between. If the numbers and timing feel like a moving target, Sleek’s accounting and tax service keeps it all on track.
How to pay corporation tax in the UK
You pay corporation tax to HMRC electronically, using your 17-character payment reference for the relevant accounting period. There’s no paper option, and you don’t get a bill in the post telling you what to pay.
Your company is responsible for calculating the amount, reporting it, and paying it. HMRC won’t chase you with a figure the way PAYE deducts tax automatically.
The fastest methods are Faster Payments and CHAPS, which usually reach HMRC the same or next day. Bacs and Direct Debit take around three working days, or five for a first-time Direct Debit.
You can also pay by debit card or corporate credit card online, though card payments carry a small non-refundable fee. Once you’ve registered for corporation tax, the payment reference is the part that trips people up, so it’s worth getting right.
When is corporation tax due?
Corporation tax is due 9 months and 1 day after the end of your accounting period, which for most companies sits before the filing deadline. If your accounting period ends on 31 March 2026, payment is due by 1 January 2027.
This is the counterintuitive bit. Your CT600 company tax return isn’t due until 12 months after your period ends, so for most companies the money is due before the return is filed. You’re effectively expected to know what you owe and pay it before you formally tell HMRC the figure.
The payment deadline is fixed and doesn’t shift if it falls on a weekend or bank holiday. If you’re paying by a method that takes a few days to clear, the funds need to reach HMRC by the last working day before the deadline.
Deadline | What it covers | Timing after period end |
Payment deadline | Paying the tax you owe | 9 months and 1 day |
Filing deadline | Submitting your CT600 return | 12 months |
Filing and paying are separate obligations, so it’s easy to confuse the two. The detail on filing your corporation tax return sits in its own guide, because the process and the deadline are different.
How much corporation tax you owe in 2026/27
How much you owe depends on your taxable profits, with three bands applying for the 2026/27 financial year. Small companies pay less, larger companies pay the main rate, and a sliding scale covers the gap.
Profit level | Rate |
£50,000 or less | 19% (small profits rate) |
£50,001 to £250,000 | Marginal relief (tapered) |
Over £250,000 | 25% (main rate) |
Marginal relief uses a fraction of 3/200 to smooth the jump between 19% and 25%. The quirk is that each extra pound of profit inside the band is effectively taxed at around 26.5%, which is higher than the 25% main rate. Your CT600 software handles the calculation, so you don’t need to work the formula out by hand.
The £50,000 and £250,000 thresholds are divided by the number of associated companies plus one, and they’re reduced for accounting periods shorter than 12 months. A fuller breakdown of the corporation tax rates is worth a look if you’re near a threshold.
Set aside roughly 20 to 25% of profit in a separate account each month, so the bill doesn't land as a shock.
How to pay corporation tax to HMRC
The simplest way to pay corporation tax is through your HMRC online account or a bank transfer quoting your payment reference. Sign in to your Business Tax Account, choose to make a corporation tax payment, and confirm the reference for the right period.
Here’s the order that works for most companies:
- Find your 17-character payment reference on your notice to deliver a return, a payment reminder, or inside your Business Tax Account.
- Choose a payment method that clears in time, allowing three working days for Bacs or Direct Debit.
- Pay using the correct HMRC bank details, which your correspondence will confirm as Cumbernauld or Shipley.
- Check your Business Tax Account after a few days to confirm the payment has landed.
Your reference changes for every accounting period, so never reuse one from a previous year. Using the wrong reference can leave your payment sitting unallocated, which makes your company look like it still owes tax even after you’ve paid.
Large companies and quarterly instalments
Companies with taxable profits above £1.5 million pay corporation tax in quarterly instalments rather than a single lump sum. This is the main exception to the 9-months-and-1-day rule, and it means paying before your accounts are even finalised.
For large companies, instalments fall in months 7, 10, 13 and 16 of the accounting period. Because the first payment is due during the period itself, companies estimate their liability and adjust in later instalments. Very large companies, with profits over £20 million, pay on an earlier schedule again.
The £1.5 million threshold is reduced pro rata for associated companies and for shorter accounting periods. Most small and medium companies never touch this regime, but it matters if your profits are growing fast.
What happens if you pay corporation tax late
If you pay corporation tax late, HMRC charges daily interest on the unpaid amount from the day after the deadline until you clear it. There’s no fixed penalty for late payment alone, but interest builds up the longer the balance sits outstanding.
The late payment interest rate is 7.75% from 9 January 2026, set at the Bank of England base rate plus 4%. Interest is simple, not compounded, and runs daily, so even a short delay on a large bill adds up.
Late payment is separate from late filing. Filing your CT600 late triggers fixed penalties that start at £200 and rise from there, and these doubled from April 2026.
You can be caught by both at once, so missing the filing penalties on top of interest gets expensive quickly.
If you can’t pay in full, pay what you can by the deadline to reduce the interest, then contact HMRC’s Business Payment Support Service about a Time to Pay arrangement.
Acting before the deadline is always better than letting the debt grow. Keeping an eye on your trading or non-trading status also helps, since dormant companies still have obligations.
How Sleek helps with paying corporation tax
Corporation tax catches people out because the payment deadline arrives before the return is due, and the rates shift depending on profit. Getting both right, on time, is where most of the stress sits.
Sleek calculates what you owe, files your return, and reminds you to pay before the deadline. That means no missed dates, no unexpected interest, and no scramble to work out a 17-character reference the night before payment is due.
Disclaimer: The preceding information is not legal advice. This content is aimed to provide general guidance. For more formal or legal advice, contact Sleek directly.
450,000
businesses worldwide.
satisfaction rate from
16,000 surveyed clients.
FAQs on how to pay Corporation Tax
How do I pay my Corporation Tax bill online?
The most common way is via online bank transfer (Faster Payments) or the Government Gateway using a debit card. Always include your 17-character payment reference to ensure the funds are allocated correctly.
Can I pay my corporation tax in instalments if I’m a small company?
Not as a matter of routine. The quarterly instalment regime only applies to companies with profits above £1.5 million, so most small companies pay in one go. If you can’t afford the lump sum, though, you can ask HMRC for a Time to Pay arrangement, which spreads the bill over several months. Interest still runs on the outstanding balance, so apply before the deadline.
Do I get a reminder from HMRC before corporation tax is due?
Sometimes, but you should never rely on it. HMRC may send a payment reminder to your Business Tax Account or by post, yet the legal duty to calculate and pay sits with your company regardless. There’s no automatic bill the way PAYE works. The safest approach is to diarise the date yourself, 9 months and 1 day after your period end.
What’s the difference between my UTR and my corporation tax payment reference?
Your Unique Taxpayer Reference is a permanent 10-digit number that identifies your company. Your payment reference is a 17-character code specific to one accounting period, and it changes every year. You must quote the payment reference, not the UTR, when paying. Using the wrong one can leave your money unallocated and your company showing as owing tax.
What if I overpay my corporation tax?
HMRC refunds the overpayment and pays you repayment interest on it. This happens if your final profit turns out lower than estimated, or you amend your return. The repayment rate is 2.75% from 9 January 2026, deliberately lower than the late payment rate. You can find the current figure on the HMRC interest rates page on GOV.UK before you check any calculation.
View more
Can I reduce my corporation tax bill before the deadline?
Yes, within the rules. Allowable business expenses, capital allowances, pension contributions and reliefs such as R&D all reduce taxable profit before the rate applies. Timing income and costs to stay below a threshold can also help if you’re near the marginal band. There are several legitimate routes to reduce your corporation tax, and planning ahead of your year-end gives you the most options.
What are the late payment penalties for Corporation Tax in 2026?
From 1 April 2026, fixed penalties for late filings start at £200 for being one day late and rise to £400 if you are more than three months late. In addition to these fixed fines, HMRC charges daily interest on any unpaid tax.
