Taxable Profits £1.5 Million (or below)

As a limited company or organisation, you need to pay your Corporation Tax bill on any profits by nine (9) months and one (1) day after the end of your accounting period.

As a rule, an accounting period is the same as a financial year. But, you could have two accounting periods in your limited company’s first accounts and Company Tax Return.

Taxable Profits more than £1.5 Million

Some companies, generally the larger ones, must pay Corporation Tax in instalments. A ‘large’ company refers to one with annual profits above the upper limit for the accounting period in question. Even so, some exceptions do apply.

Same Day (or next day)

• CHAPS (Clearing House Automated Payment System)
• Online or telephone banking when using the ‘Fast Payments’ method.

3 Working Days

• Bacs (Bankers’ Automated Clearing Services)
• Bank or Building Society
• Direct Debit (if set up on a previous occasion)
• Online by debit card or a corporate credit card

5 Working Days

• Direct Debit (if you have not set one up on a previous occasion)

Note: Under new Corporation Tax rules you can no longer pay the bill by postal methods or at the Post Office.

Weekends and UK Bank Holidays do not count as working days. Make sure the payment reaches HMRC account on the last working day before (unless using the ‘Faster Payments’ method).

Payment Reference Number

You will have a 17-character Corporation Tax payslip reference. Quote this number for the accounting period that you are paying. You can find your payslip reference number:

• On any payslip sent to you by HM Revenue and Customs (HMRC).
• Via your company HMRC online account (select ‘View account’ and then ‘Accounting period’).

Note: Using the wrong reference number is likely to delay the clearance of your payment.

How Long it Will Take

Online or telephone banking (using Faster Payments) usually reach HMRC account the same day or the following day. This includes weekends and bank holiday periods in the United Kingdom.

CHAPS payments should go into the HMRC account on the same working day. But, they must be made within the bank processing cut-off time. As a rule, Bacs transactions take 3 working days to clear.

Note: Every bank has its own processing limits and processing cut-off times. Check these limits and times before planning a date to send bill payments.

Paying by Debit or Corporate Credit Card Online

You can pay tax online by entering your payment details into the system. There is a non-refundable fee for paying by corporate credit card. You may need to use one of the other payment methods for Corporation Tax if the card does not cover the full amount.

Note: You cannot pay this kind of tax bill with a personal credit card. Using the wrong reference number will delay the transaction.

Paying at a Bank or Building Society

You can make the bill payment at a bank or building society branch by cash or by cheque. Remember to use the payslip that you got from HM Revenue and Customs and allow three working days for the transaction.

If you choose to pay by cheque make it payable to ‘HM Revenue and Customs only’ followed by your 17-character Corporation Tax payslip reference for the accounting period that you are paying.

Note: If you do not have a payslip you would need to pay by another method instead, such as by:

• Debit or credit card online
• Direct Debit
• Online or telephone banking

How Long it Will Take

You should allow three (3) working days for the payment to reach the bank account of HM Revenue and Customs.

Note: You can pay your tax bill by debit or credit card after setting up the payment system with HMRC.

Paying Corporation Tax by Direct Debit
You can use y

You can use your company HMRC online account to set up and to make changes to a Direct Debit. Use your 17-character payslip reference for the accounting period that you are paying.

Group Payment Arrangements

Making joint payments is a way for a group of companies to save money on Corporation Tax bills. So, you can pay corporate taxes under Group Payment Arrangements if your company is in a group. In this case, HM Revenue and Customs would send you the correct payslip reference by letter.

How to Tell HMRC No Payment is Due

If you do not tell HM Revenue and Customs that you have nothing to pay, they will send payment reminders to you. Even so, you still need to file your company tax return. Tell HMRC by (either):

• Filling in the ‘nil to pay’ form.
• Sending back the payslip on the reminder you received from HMRC and mark it ‘NIL due’.