Ensuring clients meet their Corporation Tax payment obligations is a fundamental aspect of compliance. The rules governing payment dates are split into two distinct regimes, determined by the company’s level of taxable profits. Understanding which regime applies, the precise deadlines, and the consequences of non-compliance is critical. This guide provides a detailed breakdown of the payment rules, including the system of quarterly instalments and the latest penalty frameworks.
The Standard Payment Deadline
For the majority of companies, the rules are straightforward. Corporation Tax is due and payable nine months and one day after the end of the relevant accounting period. This obligation arises automatically, without any notice or assessment from HMRC.
| Accounting Period Ends | Corporation Tax Due Date |
|---|---|
| 31 December 2025 | 1 October 2026 |
| 31 March 2026 | 1 January 2027 |
| 30 June 2026 | 1 April 2027 |
If a company has no Corporation Tax to pay for an accounting period, it can notify HMRC via the online service.
Quarterly Instalment Payments (QIPs) for Large and Very Large Companies
Companies with higher profits fall under the Corporation Tax (Instalment Payments) Regulations 1998, requiring them to pay their liability in instalments.
A company’s size for QIP purposes is determined by its profits for the accounting period:
- Large Company: Profits exceed £1.5 million.
- Very Large Company: Profits exceed £20 million.
These profit thresholds are proportionately reduced for accounting periods shorter than 12 months and are divided by one plus the number of the company’s associated companies. A company is not required to pay by instalments if its total tax liability for the period does not exceed £10,000 (proportionately reduced for short periods).
There is also a key exemption for growing businesses: a company is not required to make instalment payments in its first accounting period of being “large”, provided its profits for that period do not exceed £10 million.
Instalment Due Dates
The dates and number of instalments depend on the company’s size and the length of its accounting period. For a standard 12-month period, the dates are as follows:
| Instalment | Large Company Due Date | Very Large Company Due Date (APs from 01/04/2019) |
|---|---|---|
| First | 6 months and 13 days from the start of the AP. | 2 months and 13 days from the start of the AP. |
| Second | 3 months after the first instalment date. | 3 months after the first instalment date. |
| Third | 3 months after the second instalment date. | 3 months after the second instalment date. |
| Fourth (Final) | 3 months and 14 days from the end of the AP. | 3 months and 14 days from the end of the AP. |
Source: The Corporation Tax (Instalment Payments) Regulations 1998.
How to Make Corporation Tax Payments
Since 2011, all companies must pay their Corporation Tax and related liabilities electronically. Accepted methods include:
- Faster Payments, Bacs, or CHAPS
- Online or telephone banking
- Debit or credit card via HMRC’s online service
When making a payment, you must use the correct 17-character payment reference number for the specific accounting period being paid. This reference changes for each period and is crucial for ensuring HMRC allocates the funds correctly.
Interest and Penalties for Non-Compliance
HMRC’s regime for late payment and filing is robust, combining interest charges with a multi-layered penalty system.
Interest
- Debit Interest: HMRC charges interest on any tax paid late, running from the original due date until the date of payment.
- Credit Interest: Conversely, HMRC pays interest on tax paid early. For companies in the QIP regime, credit interest is only paid if the total tax paid at any point exceeds the cumulative amount that was due.
Late Filing Penalties
It is important to distinguish late payment from late filing. Penalties for filing the Company Tax Return late apply even if there is no tax to pay. As of 1 April 2026, these fixed penalties have increased to restore their real-terms value.
| Delay in Filing | Previous Penalty | Penalty from 01/04/2026 |
|---|---|---|
| Return is late | £100 | £200 |
| Return is more than 3 months late | Additional £100 | Additional £200 |
| Three successive failures, return late | £500 | £1,000 |
| Three successive failures, return > 3 months late | Additional £500 | Additional £1,000 |
Source: Finance Act 1998, Schedule 18 and subsequent amendments.
Late Corporation Tax Payments
For ordinary Corporation Tax liabilities, HMRC currently charges late-payment interest from the payment due date until the tax is paid. The proposed harmonised standalone late-payment penalty regime has not been implemented for Corporation Tax, so it should not be confused with the penalty rules that already apply to VAT or Income Tax Self Assessment.
Separate penalties can apply in other circumstances, including filing a Company Tax Return late, inaccuracies, failure to notify HMRC, or deliberate or reckless failures involving quarterly instalment payments. If a company cannot pay on time, it should contact HMRC promptly to discuss support or a Time to Pay arrangement; interest normally continues to run.
The exact late-payment and repayment interest rates change with HMRC rate announcements. Check the live rate rather than relying on a fixed percentage in an evergreen guide.
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