Staying on top of Corporation Tax deadlines is essential to stay compliant and plan your cash flow. Here’s what you need to know about filing, payments, and financing options.
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If your business is liable for Corporation Tax payments, it’s important to understand your obligations, the key deadlines and the risks for making late payments to HMRC.
In this article, we discuss when you need to pay and the consequences of missing Corporation Tax deadlines, plus tips for staying on top of your commitments.
Corporation Tax is the government’s levy on the profits gained by limited companies in the UK (or foreign companies with UK branches) and certain unincorporated organisations, such as voluntary groups and sports clubs*. This tax applies to trading profits, capital gains (profits on assets sold) and other taxable income that turns a profit across your accounting period.
The rate of Corporation Tax that businesses must pay is between 19% and 25%, depending on your earnings. If your limited business or organisation has augmented taxable profits (taxable profits plus exempt distributions) of £50,000 or less, you’ll owe the small profits rate of Corporation Tax, which is 19%. The main rate of Corporation Tax (25%) applies to those with profits above £250,000.
Once you’ve determined your company’s applicable tax rate (based on adjusted augmented profits), the rate is applied to the taxable total profits (TTP) to give you your liable Corporation Tax amount.
If your total profits fall between these two rate thresholds, you can claim “Marginal Relief”, which means you’ll pay a bridging rate between the higher and lower rates. You can estimate your likely relief with the UK government’s Marginal Relief calculator, but essentially the formula is as follows:
Marginal Relief = (Upper Limit−Profits) × 3/200
The 3/200 fraction equates to 0.015 (or 1.5%) and is used to ensure that companies caught between the Corporation Tax rate thresholds pay a fair rate.
Note: If your company is part of a group or has associated businesses, the taxable profits thresholds are divided by the number of associated companies.
*Learn more about unincorporated associations at Gov.uk’s dedicated page.
Unlike, income tax, which is automatically paid to HMRC, the government requires these liable organisations to submit Corporation Tax returns, calculate their tax owed over a 12-month period** and make payments by pre-defined deadlines. There are penalties and charges for those who fail to meet these deadlines.
When you must file your company’s tax return and make payments depends on these factors:
Let’s break down what you need to know about UK Corporation Tax deadlines.
Your tax return filing due date is 12 months after the end of your accounting period. Dates will vary, as businesses have different cycles. However, this can be changed, and many UK companies set their accounting period to finish on 31st March to tie in with HMRC’s tax year.
**There are instances where an accounting period covers more or less than 12 months, say, if you’re in your first year of business, you’ve stopped trading or changed your accounting period. You may need to file two returns. See HMRC’s information on accounting periods to find out your particular requirements.
Your payment deadlines for Corporation Tax liabilities vary depending on the dates of your accounting period and whether you’re required to make an annual payment or quarterly instalments.
If you have taxable profits of up to £1.5 million, your company’s Corporation Tax is due 9 months and 1 day after the end of your accounting period. So, say your accounting year ends on 31st March, this means your payment deadline would be 1st January the next year.
Larger companies with taxable profits of between £1.5 million and £20 million must pay Corporation Tax in quarterly instalments. The instalment payment dates will be determined by your accounting cycle. HMRC categorises those with profits exceeding £20 million as “very large companies”, and imposes stricter payment schedules.
There are various exceptions, where a company is not liable to make quarterly instalments, such as when an accounting period is less than a year. See HMRC’s exceptions on its dedicated page on paying Corporation Tax in instalments.
If you don’t file your tax return on time, with a completed CT600 form, accounts for the financial period and supporting details of how the figures were calculated, the government will issue penalties for late submission and payments. This can lead to financial, legal and reputational issues.
Here are the main consequences of missing UK Corporation Tax deadlines and making late payments:
You can appeal against penalties for late tax returns via HMRC’s appeals process if you have a reasonable excuse for missing your Corporation Tax filing deadline. View HMRC’s list of reasonable excuses for late tax returns.
Ensuring you’re managing your cash flow effectively is key. However, tax deadlines and typical seasonal peaks don’t always coincide, meaning many businesses can struggle to pay their tax without having cash flow issues.
According to iwoca’s 2024 SME Expert Index insights, managing cash flow is the top reason for loan applications, cited by 61% of brokers—up from 49% the year before.
Using business tax financing can plug cash flow gaps and provide much-needed funds around Corporation Tax deadlines. A tax loan provides fast access to capital during these key periods, helping you meet your obligations, avoid costly penalties and interest on late payments and keep operations running smoothly.
iwoca is a leading small business loan provider for UK companies, offering flexible short-term finance solutions to ease cash flow pressure and empower growth.
Here are just a few great reasons to use iwoca for Corporation Tax financing:
Filing your tax return late and missing payment deadlines can negatively impact your credit score. So, using tax loans responsibly can help you make prompt tax payments while building your credit history.
The onus is on organisations to predict and correctly calculate their tax liabilities and ensure returns and payments are submitted on time.
Here are a few ways to manage your Corporation Tax commitments effectively:
For more details on our finance solutions, explore our Flexi-Loans and see how we can help your business reduce the stress of managing company tax commitments.
Learn more about iwoca’s business tax financing
Corporation Tax is due 9 months and a day after your company’s accounting period ends and you are required to pay this as an annual payment or quarterly instalments, depending on the size of your profits. Learn more about Corporation Tax deadlines and your responsibilities.
Yes, businesses can claim various forms of Corporation Tax relief. These include Marginal Relief (if your profits fall between £50,001 and £250,000) and specific forms of relief, such as capital allowances (machinery, vehicles, etc), R&D, redundancy payments and patents.
Check HMRC guidelines on what allowances and relief from Corporation Tax you may be eligible for when calculating your returns.
Tax loans are a form of business finance that offers fast access to short-term credit that helps companies cover their tax bills without dipping into cash reserves. The funds can bridge cash flow gaps in key financial periods, with loans repaid over manageable monthly instalments.
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