How to Pay Corporation Tax
By understanding these payment methods and deadlines, you can ensure that your Corporation Tax is paid on time, avoiding unnecessary interest charges and penalties.
Paying your Corporation Tax on time is crucial to avoid interest charges and penalties. HMRC provides several payment methods, each with different processing times. Here’s a detailed guide on how to pay your Corporation Tax, what to do if you have no tax due, and how to confirm that HMRC has received your payment.
Key Deadlines
Payment Deadline: Corporation Tax is due nine months and one day after the end of your accounting period.
Late Payment: If you miss this deadline, you’ll be liable for interest on the outstanding amount.
Early Payment: HMRC pays interest on early payments.
Payment Methods
Same Day Payments:
Methods: CHAPS, online, or telephone (Faster Payments).
Requirements: Most high street banks with online business accounts support same day transfers to HMRC.
Where to Pay: HMRC Cumbernauld or HMRC Shipley (refer to your Corporation Tax payslip; if unsure, pay HMRC Cumbernauld).
Three Working Day Payments:
Methods: BACS bank transfers, Direct Debit, or paying online with a credit or debit card.
In-Person Payments: Post Office, bank, or building society.
Requirements: If paying in person, take your Corporation Tax payslip sent by HMRC.
Five Working Day Payments:
Methods: Setting up a new Direct Debit for future Corporation Tax payments.
Processing Time: It takes five days to process the initial payment.
Important Information
Reference Number: Always quote your 17-digit Corporation Tax reference number for the accounting period you are paying for.
What to Do if No Tax Is Due
If your calculations show that you have no Corporation Tax to pay:
Inform HMRC:
Methods: Complete and return the 'nil to pay' form or send back the payslip reminder from HMRC with ‘NIL due’ marked on it.
Importance: Informing HMRC is necessary even if no tax is due; do not assume that inaction is acceptable.
Confirming Payment
To confirm that HMRC has received your payment:
Check Your Account:
HMRC will update your account with your latest payments within a few days, depending on the payment method.
Online: You can check your HMRC online account to verify if the payment has been processed.
Summary
Deadlines: Pay Corporation Tax within nine months and one day after your accounting period ends.
Payment Methods:
Same Day: CHAPS, online, telephone (Faster Payments).
Three Days: BACS, Direct Debit, credit/debit card, Post Office, bank/building society.
Five Days: Setting up a new Direct Debit.
Reference Number: Always use your 17-digit Corporation Tax reference number.
No Tax Due: Inform HMRC using the ‘nil to pay’ form or payslip reminder.
Confirm Payment: Check your HMRC online account for updates.
Other Articles
How to Calculate Corporation Tax
Can You Pay Corporation Tax in Instalments?
Need to file your Corporation Tax Return?
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