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How to Pay Your Corporation Tax Bill
You need to pay your Corporation Tax by the deadline to avoid interest charges. Most companies must pay 9 months and 1 day after their accounting period ends, though larger companies may need to pay in instalments. There are several ways to pay, from online banking to Direct D...
You need to pay your Corporation Tax by the deadline to avoid interest charges. Most companies must pay 9 months and 1 day after their accounting period ends, though larger companies may need to pay in instalments. There are several ways to pay, from online banking to Direct Debit, with different processing times.
Payment deadlines
Your Corporation Tax payment deadline depends on your company's taxable profits.
If your taxable profits are up to £1.5 million, you must pay 9 months and 1 day after the end of your accounting period. Your accounting period is usually your financial year, though you may have 2 accounting periods in the year you set up your company.
If your taxable profits are more than £1.5 million, you must pay your Corporation Tax in instalments. The rules differ depending on whether your profits are between £1.5 million and £20 million, or more than £20 million.
HMRC will charge you interest if you pay late. They'll also pay you interest if you pay early.
What you need to pay
You'll need your 17-character Corporation Tax payment reference number for the accounting period you're paying. This is crucial – your payment may be delayed if you use the wrong number.
You can find your reference number:
- On your 'notice to deliver your tax return' or on any reminders from HMRC
- In your company's HMRC online account – choose 'view Corporation Tax statement', 'accounting periods', then select the correct period
Your payment reference number changes with each accounting period, so you need to use a different one each time you pay. If you've saved HMRC as a payee in your online banking, your bank will automatically save the last reference number you used – remember to update it each time.
Ways to pay
You cannot pay Corporation Tax by post. Choose a payment method that allows enough time for your payment to clear by the deadline.
If the deadline falls on a weekend or bank holiday, make sure your payment reaches HMRC on the last working day before it (unless you're paying by Faster Payments using online or telephone banking).
Same day or next day
These payment methods reach HMRC on the same or next day:
- Approve a payment through your online bank account
- Online or telephone banking by Faster Payments or CHAPS
- Online by debit or corporate credit card
- At your bank or building society
3 working days
- Direct Debit (if you've set one up for HMRC before)
- Online or telephone banking by Bacs
5 working days
- Direct Debit (if you have not set one up for HMRC before)
Approve a payment through your online bank account
You can pay directly using your online or mobile banking app. When you're ready to pay, start your Corporation Tax payment on the HMRC website and select the 'pay by bank account' option.
You'll be directed to sign in to your online or mobile banking account to approve a payment to 'HMRC Shipley'.
The payment is usually instant but can take up to 2 hours to show in your bank account. You'll need your online banking details ready to pay this way.
Pay by Direct Debit
Set up and manage Direct Debits through your company's HMRC online account.
Allow 5 working days to process a Direct Debit the first time you set one up. After that, it should take 3 working days each time you pay.
Payments will appear on your bank statements as 'HMRC NDDS'. If you've not used your Direct Debit for 2 years or more, check with your bank that it's still set up.
Pay by online or telephone banking
You can pay by Faster Payments, CHAPS or Bacs from your online bank account or by phoning your bank.
UK bank accounts
Your 'notice to deliver your tax return', or any reminder from HMRC, will tell you which account to pay into. If you're not sure, use HMRC Cumbernauld.
HMRC Cumbernauld:
- Sort code: 08 32 10
- Account number: 12001039
- Account name: HMRC Cumbernauld
Or HMRC Shipley:
- Sort code: 08 32 10
- Account number: 12001020
- Account name: HMRC Shipley
Overseas bank accounts
HMRC Cumbernauld:
- Account number (IBAN): GB62 BARC 2011 4770 2976 90
- Business Identifier Code (BIC): BARCGB22
- Account name: HMRC Cumbernauld
Or HMRC Shipley:
- Account number (IBAN): GB03 BARC 2011 4783 9776 92
- Business Identifier Code (BIC): BARCGB22
- Account name: HMRC Shipley
Some banks will charge you if you do not pay in pounds sterling.
If you need to provide your bank with HMRC's banking address, it is:
Barclays Bank PLC
1 Churchill Place
London
United Kingdom
E14 5HP
How long bank transfers take
Payments made by Faster Payments (online or telephone banking) will usually reach HMRC on the same or next day, including weekends and bank holidays.
CHAPS payments usually reach HMRC the same working day if you pay within your bank's processing times.
Bacs payments usually take 3 working days.
Check your bank's transaction limits and processing times before making a payment.
Pay by debit or corporate credit card
You can make a full payment online using a debit or corporate credit card. There is a non-refundable fee if you use a corporate credit or debit card. You cannot pay by personal credit card.
Your payment will be accepted on the date you make it and not the date it reaches HMRC's account (including weekends and bank holidays).
Make sure the details you enter match those held by your bank or card provider. For example, the billing address should match the one your card is currently registered with.
Pay at your bank or building society
You can make payment at your own branch, by cheque or cash, between Monday to Friday.
Make sure you:
- Use the paying-in slip sent by HMRC
- Make the cheque payable to 'HM Revenue and Customs only' and write your reference number on the back
HMRC will accept your payment on the date you make it, not the date it reaches their account, if you pay between Monday to Friday.
If you don't have a paying-in slip, you'll need to use another payment method.
Paying Corporation Tax penalties
You're charged late filing penalties if you do not file your Company Tax Return on time, even if there is no tax to pay.
Pay penalties using any of the available ways to pay and your 17-character Corporation Tax payment reference number for the accounting period that the penalties apply to.
Sources
This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.
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