How to Pay Corporation Tax to HMRC [Complete Guide]

You can pay Corporation Tax to HMRC online, by bank transfer, Direct Debit, or through your online banking account.

If you run a limited company in the UK, paying Corporation Tax is mandatory, and getting it wrong can lead to penalties and interest.

Whether you've just filed your first set of accounts or you're making sure you don’t leave anything to chance, here's what you need to know about how to pay Corporation Tax to HMRC.

Key points

• Corporation Tax is usually due before your CT600 is filed 📅
  Most limited companies have to pay Corporation Tax within 9 months and 1 day after the end of their accounting period, while the Company Tax Return is normally due 12 months after the year end.
• The amount you pay depends on your company's profits 💷
  Companies with profits up to £50,000 usually pay 19%, while profits over £250,000 are taxed at 25%. Businesses between those thresholds may qualify for marginal relief.
• Late filing and late payment are treated differently ⚠️
  HMRC charges interest on late Corporation Tax payments, while late CT600 submissions trigger fixed penalties and extra charges if delays continue.
• Several tax reliefs can reduce your Corporation Tax bill 📉
  Reliefs like Annual Investment Allowance, trading loss relief, R&D tax credits, and full expensing can lower the amount your company owes if claimed correctly.
• ANNA helps keep Corporation Tax under control 🚀
  ANNA automatically tracks income and expenses, estimates your tax bill in real time, prepares CT600 filings, and keeps everything organised in one place so deadlines and paperwork don't pile up.

What is Corporation Tax?

Corporation Tax is a tax on the profits of UK limited companies. It applies to trading profits, investment income, and gains from selling assets. It applies to your company's accounting period rather than the standard April-to-April tax year used for personal taxes.

Unlike Income Tax, which HMRC collects directly from individuals, you're responsible for calculating your own Corporation Tax bill and paying it on time.

Corporation Tax rates for 2026/27

The current system uses a small profits rate, a main rate, and marginal relief for companies in between. Here's how it works:

If your profits fall between £50,001 and £250,000, you'll usually pay Corporation Tax at the 25% main rate and then claim marginal relief. This reduces your effective tax rate gradually towards 19%.

The £50,000 and £250,000 profit thresholds are also affected by associated companies. HMRC divides both thresholds by the number of associated companies under common ownership or control.

For example:

• One company keeps the full £50,000 and £250,000 thresholds
• Two associated companies reduce the thresholds to £25,000 and £125,000 per company
• Four associated companies reduce them to £12,500 and £62,500 per company

This means companies with associated businesses can move into higher Corporation Tax bands sooner.

🧠 Good to know

Associated companies usually include businesses controlled by the same person or group. The rules can become complicated with family ownership, holding companies, or dormant companies, so check your position carefully before assuming which rate applies.

When is Corporation Tax due?

The Corporation Tax payment deadline is earlier than the filing deadline. Here's how the key dates work for a typical company:

For example, if your accounting period ends on 31 March 2026, you'll usually need to pay any Corporation Tax owed by 1 January 2027, and file your CT600 by 31 March 2027.

🧠 Good to know

Large companies with profits over £1.5 million pay Corporation Tax in quarterly instalments rather than in a single payment. The rules are specific, so check with an accountant to see if this might apply to you.

How to calculate your Corporation Tax bill

You'll base your Corporation Tax calculation on your company's taxable profits, which aren't necessarily the same as your accounting profit.

You'll typically need to:

• Start with your accounting profit as shown on your profit and loss account
• Add back disallowable expenses such as client entertainment, fines, or depreciation that HMRC doesn't allow as deductions
• Deduct capital allowances using HMRC's capital allowance rules
• Apply any reliefs or losses carried forward from previous years, such as R&D tax credits or trading losses
• Apply the correct tax rate to get your Corporation Tax bill

💡 Did you know?

ANNA's Auto Accountant lets you track business income and expenses throughout the year. When it comes to calculating your taxable profits, there are no unpleasant surprises. Categorising transactions as you go means you've always got an up-to-date picture of your position.

How to register for Corporation Tax

You'll need to register for Corporation Tax with HMRC within three months of starting to trade. Note that incorporating a company at Companies House doesn't automatically register you for Corporation Tax.

Here's how to register:

• Sign in to HMRC Online Services using your Government Gateway user ID. If you don't have one, you'll need to create an account first.
• Select 'Register for Corporation Tax' and enter your company's Unique Taxpayer Reference (UTR). HMRC usually sends your UTR in the post within a few weeks of incorporation.
• Provide your accounting period dates from your first financial year, which you'll have chosen when setting up your company.
• Confirm your company details, including your registered address and business activity.

Once registered, HMRC will set up your account and you'll be able to file returns and make payments through your online account.

How to file your Company Tax Return

Before you pay, you'll need to calculate your bill, and that means filing a Company Tax Return, also known as a CT600. This is a separate process from paying, and here's how you can do it:

• Prepare your statutory accounts: Your accountant or accounting software will typically produce these, covering your profit and loss account and balance sheet.
• Complete the CT600 form: You can use HMRC's online service or compatible third-party software. You'll also need to attach your statutory accounts and a tax computation.
• Submit via HMRC's online portal: You can't file a paper CT600 for most companies, as HMRC requires online submission.
• Keep a copy of your submission: Besides keeping a copy, note the submission reference number for your records.

🧠 Good to know

You'll need to file a Company Tax Return even if your company made no profit or a loss. A 'nil return' still needs to be submitted on time to avoid penalties.

How to pay Corporation Tax to HMRC

Once you know what you owe, paying HMRC is straightforward, but you'll need to use an approved payment method. HMRC no longer accepts cheques for Corporation Tax.

You'll need your 17-character Corporation Tax payment reference number, which you'll find in your HMRC online account or on any correspondence from HMRC. It usually looks something like this: 1234005678A00101A.

Here are the payment methods HMRC accepts:

• Online banking or bank transfer (BACS/Faster Payments): This is the most common way to pay Corporation Tax. You'll send the payment directly to HMRC's bank account and use your Corporation Tax reference number as the payment reference.
• CHAPS: This is used for same-day payments when you need the money to reach HMRC quickly. Your bank may charge a fee for using CHAPS transfers.
• Direct Debit: You can set up a Direct Debit through your HMRC online account to pay Corporation Tax automatically. The first setup usually takes at least five working days.
• Corporate credit or debit card: You can pay online using HMRC's payment portal with a corporate card. Some corporate credit cards may include additional processing fees.
• At your bank or building society: You can pay in person using an HMRC payslip at a bank or building society branch. You'll usually need to request the payslip from HMRC in advance.

HMRC's bank details for Corporation Tax are:

💡 Did you know?

ANNA's business account makes bank transfers straightforward. You can pay HMRC directly from your ANNA account, with your full payment history in one place – useful when you need to prove payment to an accountant or during a compliance check.

What happens if you pay late?

HMRC charges interest on late Corporation Tax payments from the day after the payment deadline.

For 2026/27, the late payment interest rate is typically set at the Bank of England base rate, plus 2.5%, so the longer you delay, the more interest builds up.

You don't get an automatic late payment penalty just for paying late, but you can still be charged penalties for late filing of your CT600.

Here's how the late filing fees work:

If you think you can't pay on time, it's better to contact HMRC early. You may be able to set up a Time to Pay arrangement, which lets you spread the cost over an agreed period instead of paying everything at once.

Reliefs that can reduce your Corporation Tax bill

Several reliefs are available that can reduce what you owe. You'll usually claim these through your Company Tax Return.

Here are the main options:

• Annual Investment Allowance (AIA): This allowance lets you deduct the full cost of qualifying plant and machinery in the year you buy it.
• R&D tax credits: These credits are available if your company works on innovative projects in science or technology.
• Trading loss relief: This relief allows you to carry losses forward against future profits or, in some cases, carry them back against profits from the previous year to get a tax repayment.
• Creative industry tax reliefs: These reliefs apply to companies in film, television, video games, and similar sectors.

The rules around reliefs are specific, and claiming incorrectly can trigger an HMRC enquiry. If you're unsure what you're entitled to, consider speaking to an accountant before you file.

How ANNA helps with Corporation Tax

When it comes to Corporation Tax, the real challenge is staying on top of your numbers throughout the year so you always know what you're likely to owe.

ANNA keeps everything organised automatically, so Corporation Tax becomes predictable instead of stressful.

Here's how ANNA helps:

• CT600 preparation and filing: ANNA helps prepare your Company Tax Return and submits it directly to HMRC on your behalf.
• Built-in UK business account: Your business finances stay separate from personal spending, giving you a clear view of cash flow and profit at all times.
• Automated bookkeeping: Every sale, expense, and transaction is automatically recorded and categorised, so your accounts are always up to date and ready for tax time.
• Free 2026/27 Self Assessment filing: ANNA will prepare and file your personal tax return to HMRC without spreadsheets, confusion, or manual calculations, completely for free. If you've already registered with another provider, ANNA will refund the filing fee when you switch.
• Smart tax pots: ANNA can automatically set money aside for taxes, making cash flow easier to manage throughout the year.
• Real-time tax estimates: ANNA tracks your profit as you go and shows an ongoing estimate of your Corporation Tax bill, so you always know where you stand.
• Smart expense tracking: Business costs are automatically separated and categorised, helping ensure you don't miss allowable deductions when working out your profit.
• Organised financial records: All your income and expenses are stored in one place, making it easy to prepare accounts and file your CT600 without scrambling for paperwork.
• Deadline reminders: ANNA keeps track of key Corporation Tax deadlines and reminds you before payments or filings are due, so nothing gets missed.
• 24/7 expert support: If your tax questions tend to come up in the middle of the night, ANNA has you covered with a reliable, professional support team working around the clock.

Open an ANNA account in minutes and stay on top of your Corporation Tax from day one.