What you need before you start
- Your company's 10 digit Unique Taxpayer Reference for corporation tax.
- Your accounting period dates, usually matching your company year end.
- Your taxable profit, which is accounting profit adjusted for tax, such as adding back depreciation and claiming capital allowances.
- Your 17 character corporation tax payment reference for the specific period, which changes each year.
How to pay corporation tax, step by step
- Register for corporation tax. Do this within 3 months of starting to trade. HMRC then knows to expect a return and a payment.
- Work out your taxable profit. Start with accounting profit, add back items that are not tax deductible such as depreciation and client entertaining, then deduct capital allowances on equipment. The result is your taxable profit.
- Apply the right rate. Up to £50,000 of profit the rate is 19%. Over £250,000 it is 25%. Between the two you pay 25% reduced by marginal relief, which produces an effective rate that climbs gradually from 19% to 25%.
- Note both deadlines, in the right order. The payment is due 9 months and 1 day after the period ends, which is before the CT600 return is due at 12 months. Many directors are caught out because the money is due before the paperwork.
- Get your payment reference. Use the 17 character reference for the exact accounting period you are paying. Using last year's reference sends the money to the wrong place.
- Pay HMRC. Pay by online or telephone banking, Faster Payments, or direct debit. Allow enough time for the payment to clear before the deadline, especially with a new direct debit, which can take longer the first time.
- File the CT600. Submit the company tax return and accounts to HMRC, and file accounts at Companies House. Paying without filing, or filing without paying, still leaves you exposed to penalties.
A worked example
Northgate Ltd has a taxable profit of £80,000 for the year to 31 March 2026. That sits in the marginal band between £50,000 and £250,000, so the company pays 25% with marginal relief, giving an effective rate a little under 25%. The tax must be paid by 1 January 2027, which is 9 months and 1 day after the year end, and the CT600 filed by 31 March 2027. The director sets the money aside as profit is earned, so the January payment is already sitting ready.
Common corporation tax mistakes
- Thinking the payment and the return share a deadline. Payment is due at 9 months and 1 day, the return at 12 months.
- Using the wrong payment reference. A new 17 character reference applies to each period.
- Forgetting marginal relief. Paying a flat 25% on profits below £250,000 means overpaying.
- Not setting money aside. Corporation tax is the company's money to hold, not spend; treat it as ring fenced.
One late payment can cost more than a year of fees
Between the deadlines, the rates, marginal relief and the changing references, corporation tax is easy to get wrong and expensive when you do. TaxTune prepares your accounts and CT600, calculates the tax correctly with every allowance claimed, and tells you the exact figure and date to pay.
Frequently asked questions
When is corporation tax due?
Corporation tax must be paid 9 months and 1 day after the end of your accounting period. For a year ending 31 March, that means paying by 1 January. The CT600 return is due later, 12 months after the period end.
What is the corporation tax rate?
The main rate is 25% on profits over £250,000. A small profits rate of 19% applies up to £50,000. Profits in between are taxed at 25% with marginal relief, giving an effective rate that rises gradually between the two.
How do I pay HMRC corporation tax?
You can pay by online or telephone banking, Faster Payments, CHAPS or direct debit, using the 17 character reference for the specific accounting period. Leave time for the payment to clear before the deadline.
What is marginal relief?
Marginal relief smooths the jump between the 19% and 25% rates for profits between £50,000 and £250,000, so companies in that band pay an effective rate somewhere in between rather than a sudden 25%.
What happens if I pay corporation tax late?
HMRC charges interest from the day after the due date, and persistent lateness can lead to penalties and closer scrutiny. Filing the CT600 late brings separate automatic penalties starting at £100.
Do I have to file accounts as well?
Yes. You file a company tax return and accounts with HMRC, and accounts with Companies House. Paying the tax does not remove the filing obligations, and each has its own penalties.
Let us handle the company's tax properly
We prepare your year end accounts and corporation tax return, claim every allowance you are due, tell you the exact tax to pay and the date it is due, and file everything with HMRC and Companies House on time. Fixed fee, no surprises, no missed deadlines.