When is corporation tax due? 

If you’re running a business in the UK, you’ll need to pay corporation tax (sometimes it’s also known as company tax). But when is it due?

Understanding when corporation tax is due is important if you want to stay compliant and avoid any HMRC penalties.

So listen up, because we’re breaking down all the deadlines when it comes to corporation tax and your accounting period. 

What is corporation tax?

Before we jump into the super-interesting world of tax dates and deadines (yawn), let’s refresh our minds about corporation tax and what it is exactly.

Corporation tax is a tax paid by businesses based on their annual profits. For limited companies, the corporation tax rate varies depending on how much profit (income minus expenses) you make.

Unlike sole traders, limited companies do not have a tax-free Personal Allowance. Sigh, it’s a tough life, we know.

So, how do I find out what rate of corporation tax I need to pay?

For companies with profits over £250,000, the rate is 25%. This is known as the main rate of corporation tax.

Those making less than £50,000 will pay a reduced rate of 19%. But things can get a little complicated between these two figures, so stick with us.

For companies with profits between £50,000 and £250,000, there’s a ‘sliding scale’ of tax rates. The main rate of 25% still applies, but Marginal Relief will be given. 

Marginal Relief is a type of tax relief awarded to medium sized businesses earning over £50k but less than £250k. The more you make, the more tax you’ll pay, up to the main rate of tax (25%).

Don’t worry if this all sounds a confusing. Your rate of corporation tax is automatically calculated when you submit your annual accounts. 

Corporation Tax deadlines: dates for your diary

Now that we’ve familiarised ourselves with the current rates, let’s find out when corporation tax is due.

Corporation tax deadlines are specific to your company. Here are the key dates you should maybe, probably, definitely to add to your diary.

Your end of accounting period

An accounting period is typically 12 months long and ends when your company’s financial year ends. 

This date is set when you register your company with Companies House. 

For example, if your financial year ends on 31 March, that’s the end of your accounting period.

Save this date! You’ll need to file your corporation tax return within 12 months of the end of your accounting period.

Why do I have two filing dates in my first year?

This all depends on when your company was incorporated, so don’t worry if you have two dates.

If your first accounts cover more than 12 months, you’ll need to file two tax returns, each with its own payment deadline.

Here’s an example: If your company was incorporated on 22 June 2023 and your first accounting period is to 30 June 2024, you’ll need to file two tax returns:

• One to cover 22 June 2023 to 21 June 2024
• And one to cover the rest of the period, 22 June 2024 to 30 June 2024 

This might not seem ideal, but it’s straightforward for an accountant and you’ll just need to file one tax return in the following years.

So, when is my corporation tax payment due?

Corporation tax is due 9 months and 1 day after the end of your accounting period. 

Let’s break this down.

If your financial year ends on 31 May 2024, you’ll need to:

• File your annual accounts with Companies House by: 28 February 2025
  
• Pay any corporation tax due to HMRC (or tell them that no payment is due) by: 1 March 2025
  
• File a company tax return for this financial year by: 31 May 2025

Do I need to file my corporation tax return by 31 January?

The corporation tax return deadline is not the same as the Self Assessment deadline for self-employed people.

But, never say never! Since your corporation tax return is 12 months after the end of your accounting period, you would only need to file by 31 January if your financial year runs from this date.

How do I pay Corporation Tax?

Your corporation tax bill will be due in full or in instalments, depending on how much you owe. You can pay it online via your HMRC tax account.

If you pay your tax bill early, HMRC will pay you interest (known as credit interest). Their interest rate is 0.5%.

Make sure to avoid paying it late though otherwise, they’ll charge you interest. And fines and penalties😰

What happens if I pay it late?

HMRC will charge your company interest if your payment is late or you don’t pay enough corporation tax.

The current corporation tax late payment rate is set at a base rate plus 2.5%, so always make sure you’re paying your bill on time.

If your bill is already late, pay it sooner rather than later to avoid any further penalties.

Struggling to pay your corporation tax? It’s best to contact HMRC directly and they may let you set up a payment plan. You can call them on 0300-200-3822.