For most UK limited companies, corporation tax is due 9 months and 1 day after the end of the accounting period. That payment normally falls before the CT600 return is filed, so the tax cash needs to be ready before the accounts are finished.
A contractor can finish a profitable year, send the records to their accountant and expect several months to pass before the return goes in. Then a payment reminder arrives. The company's tax bill is already due, even though the CT600 hasn't been submitted.
That timing catches directors because they often treat filing and payment as one task. They aren't. The payment deadline is normally 9 months and 1 day after the accounting period ends, while the CT600 filing deadline is normally 12 months after the period ends. HMRC sets out these separate obligations in its guidance on company tax returns.
Practical rule: Prepare for the tax payment when the accounting period closes, not when the CT600 is ready to file.
Why the Payment Date Catches Directors Out
A contractor with a 31 March year-end might reasonably think, “The accounts will be filed next year, so I'll deal with the tax then.” In practice, the Corporation Tax payment date normally arrives by 1 January of the following calendar year. The return can follow later, but the cash has already left the business.
That creates an awkward operational gap. The final tax computation may still be under review, yet the company must reserve enough money to meet its liability. Waiting for the finished accounts before thinking about cash flow is one of the most common ways directors turn a manageable tax bill into a rushed funding problem.
The distinction is explained clearly in this guide to the Corporation Tax filing deadline. Filing gives HMRC the return and supporting figures. Payment settles the liability. One doesn't automatically wait for the other.
The cash flow problem is predictable
The practical consequences are straightforward:
- Profits can look available: Money sitting in the company account may appear to be spare cash, even though part of it belongs to HMRC.
- The bill can arrive before certainty: Accounts work may identify adjustments, disallowable costs or timing issues after the director has already spent the cash.
- Dividends can worsen the position: Extracting profits before reserving Corporation Tax leaves the company carrying a liability without the funds to settle it.
- Late payment adds cost: HMRC charges interest from the day after the tax should have been paid, so a short delay doesn't remain cost-free.
The right habit is to treat Corporation Tax as a running reserve rather than an annual surprise. As invoices are paid and profits accumulate, directors should move an appropriate amount into a separate account or clearly ring-fenced balance. The precise reserve depends on the company's expected taxable profit and circumstances, but the control itself is simple.
The CT600 deadline still matters, but it shouldn't be the date that starts the cash planning exercise. By then, the payment decision should already have been made.
How to Calculate Your Exact Payment Date
Start with the company's accounting period, not the date on which the accounts are prepared. For the standard regime, take the final day of the period, move forward by 9 months, then add 1 day. HMRC's Corporation Tax payment guidance confirms the general rule.
For a 31 March year-end, the calculation produces 1 January of the following calendar year. For a 30 September year-end, it produces 1 July of the following calendar year. Those are useful illustrations, but they won't cover every company.
Watch the calendar edge cases
HMRC's Company Taxation Manual explains an important adjustment. The due date normally follows the corresponding day in the ninth following month. If that month doesn't contain a matching calendar day, the deadline moves to the first day of the tenth following month.
That matters for unusual period ends, particularly where the final day falls on the 29th, 30th or 31st and the relevant later month is shorter. Don't rely on a generic online example if the company's year-end has changed or doesn't fall at month-end.
The calculation process is:
- Confirm the accounting period: Use the period shown in the company's accounts and Corporation Tax records.
- Identify the final day: This is the date from which the payment calculation starts.
- Apply the nine-month rule: Move to the corresponding day in the ninth following month.
- Add one day: That normally creates the payment deadline.
- Check for a missing calendar date: If there's no matching day, apply HMRC's adjustment to the first day of the tenth following month.
- Check the banking calendar: Allow enough time for the payment method to reach HMRC by the deadline.
Short periods need separate attention
A company can have 2 accounting periods in the year it starts up, according to HMRC's company tax return guidance. That can happen where the first accounts cover a period longer than the Corporation Tax accounting-period limit, creating separate periods for tax purposes.
Each accounting period can carry its own payment date. A new director who records only the first accounts date may therefore miss a second liability. The safest approach is to confirm every accounting period separately, especially after incorporation, a change of year-end or a shortened accounting period.
Quarterly Instalments for Large and Very Large Companies
The single annual payment rule is mainly a smaller-company experience. Larger companies can move into a quarterly instalment regime, which changes the Corporation Tax payment date from one year-end event into a treasury process running throughout the accounting period.
For a company with a 12-month accounting period, HMRC says large companies generally pay 4 equal instalments. The first is due 6 months and 13 days after the first day of the accounting period, followed by payments every 3 months. For very large companies, the first instalment can be due 2 months and 13 days after the first day.
PwC's UK tax summary records the structural change for accounting periods beginning on or after 1 April 2019. Companies with profits over £20 million moved to earlier quarterly payment dates, normally in the 3rd, 6th, 9th and 12th months of the period.
| Company Type | Payment Structure | First Payment Due | Key Threshold |
|---|---|---|---|
| Smaller company | Normally one payment after the accounting period ends | 9 months and 1 day after period end | Standard regime |
| Large company | 4 equal instalments for a 12-month accounting period | 6 months and 13 days after the first day | Large-company instalment rules |
| Very large company | Earlier quarterly instalments | 2 months and 13 days after the first day can apply | Profits over £20 million |
The threshold is not just a technical label. A growing consultancy can move from holding cash for one annual liability to funding staged payments while the year is still in progress. That affects dividend decisions, payroll timing and the minimum operating balance the company should maintain.
A director approaching the threshold shouldn't wait for HMRC correspondence before modelling the change. The quarterly instalment payment guide is a useful starting point, but associated companies and changing profit levels can make the position more involved.
Worked Examples for Contractors and Directors
Worked dates make the distinction between payment and filing easier to see. The examples below use the standard single-payment rule and assume the company isn't within the large-company instalment regime.
A contractor with a 31 March year-end
The company's accounting period ends on 31 March. Applying the standard rule gives a Corporation Tax payment date of 1 January in the following calendar year. The CT600 filing deadline is normally 12 months after the period end, so the director must fund the tax before the return is filed.
The company may still be waiting for final accounts work when January arrives. That's why the reserve should be built from the year's trading profits, rather than created from whatever cash happens to remain after dividends and expenses.
A consultant with a short first accounting period
A consultant incorporates during a tax year and has a first accounting period that doesn't align neatly with the company's later year-end. The first period might be short, but its own payment date is still calculated from its closing date. If the company's first-year arrangements create 2 accounting periods, each period must be checked separately because each can produce a separate tax payment date.
This is the first-year trap. Directors often see one set of accounts and assume there's one liability, while the tax treatment can require more than one payment timetable.
A director with a 30 September year-end
A company closes its accounting period on 30 September. The standard calculation produces a payment date of 1 July in the following calendar year. The CT600 filing deadline normally follows at 12 months after the period end, leaving a later filing point than the cash deadline.
That gap can cross a busy trading period. If the director plans a dividend, equipment purchase or personal extraction after year-end, the Corporation Tax reserve should be protected first.
The exact result for an unusual year-end may need a calendar check under HMRC's corresponding-date rule. A company that changes its accounting period should recalculate the deadline from the new period, rather than carrying forward the old payment date.
The Cost of Paying Late
A director can have a profitable year and still miss the Corporation Tax deadline because the cash remains tied up in stock, unpaid invoices or planned spending. The payment date arrives before the CT600 filing deadline, so waiting for final accounts to confirm the liability leaves little room to find a shortfall.
Late payment becomes an unplanned financing cost. HMRC charges interest from the day after Corporation Tax was due, and its published late and early payment interest rates state a Corporation Tax late-payment rate of 7.75% from 9 January 2026, calculated daily until cleared funds reach HMRC.
The charge applies to the unpaid tax, not only to a separate administrative penalty. If the estimate is too low, interest continues on the outstanding balance until payment clears. Directors should therefore reserve cash months before the accounts and CT600 are complete.
Ring-fencing tax cash is cheaper and simpler than discovering the shortfall after the payment date.
What works in practice
Use a separate reserve account and record the expected Corporation Tax liability as committed cash. That prevents the balance being mistaken for money available for dividends, personal drawings or discretionary spending. Accounting software can track profit and produce an estimate, but a director still needs to review unusual costs, provisions and changes in trading.
A workable routine is:
- Reviewing the estimate regularly: Recalculate the expected liability when turnover, margins or significant expenses change.
- Protecting the reserve: Keep the tax provision outside normal working-capital decisions.
- Escalating uncertainty early: Get advice if taxable profit is difficult to forecast or growth may move the company into a different payment regime.
The guide to late tax payment penalties explains the wider consequences of missing the deadline. The practical safeguard is earlier funding. Do not wait for the CT600 to be ready before checking whether the company can afford its tax. That filing point may be months after HMRC needed the money.
Payment Methods and Practical Optimisation
The payment method affects when HMRC receives the funds. A director can calculate the correct Corporation Tax payment date and still create a problem by choosing a method that takes longer to clear.
Common options include:
- Bank transfer: Online banking or CHAPS can clear on the same day, subject to the bank's processing arrangements.
- Direct Debit: Set it up in advance so the collection can clear on the payment date.
- Cheque: Allow 3 working days for clearance.
- Corporation Tax payment card: Processing can take 3 working days.
- Standing order: Set it so the funds arrive on the payment date, rather than merely leaving the company account that day.
The practical mistake is leaving payment until the deadline morning. Bank cut-off times, weekends and bank holidays can all affect arrival. The Corporation Tax payment plan guidance is relevant where a company is concerned it can't settle the liability in full, but directors should contact HMRC before the deadline rather than assume a plan will be granted automatically.
Make the process repeatable
Keep the payment date in the company's finance calendar, record the accounting period beside it and review the date whenever the year-end changes. Move reserve funds as income is received, then compare the balance with the latest tax estimate.
Professional advice becomes more valuable when the company approaches the instalment regime, has associated companies or is considering a year-end change. Those decisions affect more than administration. They can change the timing and amount of cash the business needs to retain.
Your Corporation Tax Payment Checklist
Use this checklist before the company's next accounting period closes:
- Record the period end: Confirm the exact accounting period, including any short or first-year periods.
- Calculate the deadline: Apply the standard rule and check whether the corresponding calendar date exists.
- Separate payment from filing: Put the payment date and CT600 deadline in the calendar as different events.
- Build the reserve early: Transfer funds from trading profits before approving dividends or other discretionary payments.
- Check instalment exposure: Review whether rising profits, associated companies or group arrangements could move the company into quarterly payments.
- Choose a clearing method: Allow for the processing time of the selected payment route.
- Review strategy: Consider whether profit extraction, pension contributions or other planning decisions could affect the Corporation Tax liability and reserve requirement.
The useful question isn't "When is Corporation Tax due?" It's, "Will the company have cleared funds ready before the return is filed?" That shift turns a deadline into a manageable financial control.
Tax Compass provides practical guidance and decision-support tools for limited company tax planning, including Corporation Tax timing, payment plans and profit extraction considerations. Visit Tax Compass to review the relevant guidance and identify when a tax strategy review may be appropriate.