How to Pay Your Corporation Tax

What is Corporation Tax

Corporation Tax is a tax which limited companies, foreign companies with a UK branch, and unincorporated associations (e.g., clubs, co-operatives) pay to HMRC on the profits they make from their business. It is charged on profits made from investments, trading, and the sale of assets.

Every company is responsible for calculating their taxable profits and submitting a company tax return (CT600). They are also responsible for ensuring any Corporation Tax owed is paid to HMRC. For many business owners, this process feels complicated and overwhelming, especially when it comes to understanding what counts as taxable profit and making sure everything is filed as and when it should be.

At ad+ we take the stress out of this process. We handle the calculations, preparation and submission of your tax return. We also help identify allowable expenses and tax reliefs, so you don’t pay more tax than necessary. With the right support, managing this process can be straightforward – allowing you to focus on running your business and achieving your goals.

After your return has been completed, we’ll confirm how much Corporation Tax is due and the deadline for payment. Because the payment is made directly to HM Revenue & Customs, it will need to be paid from your business bank account. The sections below explain when Corporation Tax must be paid, the different ways you can make a payment, and the payment reference you’ll need to include.

When is Corporation Tax Due?

Corporation Tax in the UK is due 9 months and 1 day after the end of your company’s accounting period. This is paid directly to HMRC.

 For example, if your company’s year-end is 31st March, the corporation tax payment deadline would be 1st January the following year.

Your Corporation Tax Payment Reference

To make payment you need your 17-character Corporation Tax payment reference. This is what ensures the payment is not only just allocated to your company’s account but also allocated to the correct accounting period.

Each accounting period has a different payment reference, so it’s important to use the correct one when making your payment.

You can find your reference in the following ways

• HMRC online account: Go to View Account > Accounting period
• On your Corporation Tax payslip issued by HMRC

How to Pay Corporation Tax

There are different options for how to make payment, you can pay via online bank transfer (Faster Payments, CHAPS, or BACS) or pay with your debit card through the HMRC portal. 

Whichever method you decide to go with, it’s essential your 17-character payment reference number is used.

Pay Online by Debit or Credit card

• Go to the HMRC payment page and log in – https://www.gov.uk/pay-tax-debit-credit-card
• Click on “Start Now” and select the tax you want to pay
• Insert your 17-character reference number. Please see details below of how to locate. 
• Insert the Amount you are paying and click “Continue”
• Follow the steps to insert your card details to complete the payment. 

Online or Telephone Banking (Faster Payments, BACS or CHAPS)

You must use your 17-character reference for the relevant tax period as the bank transfer reference to ensure your payment is not delayed. You will also find the account you are to use (HMRC Cumbernauld or HMRC Shipley) to make payment on any payslip. 

If you are unsure or cannot find this, use Cumbernauld. Please allow 3 working days for payments to reach HMRC. 

Need help with your Corporation Tax?

If you are looking for support preparing your Corporation Tax return, our team at ad+ can help. We’ll calculate your tax, submit your tax return and provide payment instructions so you know exactly what you have to pay and when.

With our guidance, managing Corporation Tax becomes simple for you, letting you focus on running your business and achieving your goals.