How do I Pay my Corporation Tax Bill
Paying your Corporation Tax (CT) bill to HMRC is a fundamental compliance requirement for any limited company or organisation liable for this tax. Understanding when and how to make these payments correctly is essential to avoid penalties and ensure your business remains in good standing with HMRC.
What is a Corporation Tax Bill?
Corporation tax bill refers to the amount of tax a UK limited company (or other associations) owes to HMRC on its taxable profits.
This tax is calculated by your business itself based on its profits from trading, investments, and selling assets. It’s your company’s responsibility to accurately calculate this liability and ensure the correct payment is made by the due date.
When are Corporation Tax Payments Due?
Corporation Tax payment deadlines depend on your company’s size and profits. For small and medium-sized companies (with profits of £1.5 million or less), payment is due 9 months and 1 day after the end of your accounting period. So, if your year ends on 31 March, the tax is due by 1 January the following year.
For larger companies (profits over £1.5 million), Corporation Tax must be paid in four quarterly instalments, starting 6 months and 13 days after the beginning of the accounting period.
Corporation Tax payment is due before your tax return is filed, which has a separate deadline of 12 months after the end of your accounting period. Always make sure to plan ahead to avoid interest or penalties from HMRC.
Ways to Pay Your Corporation Tax Bill
HMRC offers several convenient ways to pay your corporation tax bill online, including methods like tax accounts via debit or corporate cards, through bank accounts, online or over the phone banking too. This makes the submission and payment processes a lot easier and quicker.
What if You Can’t Pay on Time?
If your business is struggling to pay its Corporation Tax bill by the deadline, it’s crucial to act quickly. Ignoring the problem will only lead to further penalties and interest. In such situations, it may be possible to arrange a ‘Time to Pay’ arrangement with HMRC, allowing you to pay your tax bill in instalments over an agreed period.
How We Can Help
Managing corporate tax obligations can be complex at times. At Hartley Fowler, we want to make it as easy as possible; that is why we provide comprehensive support to ensure your company meets its responsibilities efficiently. Our services include:
- Accurately calculating your corporation tax liability.
- Advise on payment deadlines and methods tailored to your company’s size.
- Aid in finding your correct payment reference numbers.
- Appealing any possible penalties
Here at Hartley Fowler, our dedicated team of professionals ensures that all your concerns and enquiries are attended to with as much support as we can possibly provide. Get in touch with our expert team today to discuss your corporation tax bill payment needs.
FAQ’s
What happens if I miss the corporation tax payment deadline?
When it comes to Corporation Tax, missing the payment deadline has direct and immediate consequences from HMRC, such as:
- Interest charges
- Outstanding tax penalties which increase the longer the tax bill goes unpaid
- Enforcement Action – HMRC taking more severe actions, which may include debt collection agencies, winding-up petitions for the company, or, in serious cases, directors becoming personally liable for company debts.
What happens if I can’t pay my corporation tax bill in full?
If you can’t pay your tax bill in full, you will need to contact HMRC immediately to discuss a ‘Time to Pay’ arrangement. This allows you to pay in instalments over an agreed period, helping to avoid further penalties and enforcement action. Proactive communication is key in these times.
Can I pay my corporation tax bill with a debit or credit card online?
Yes, you can pay your Corporation Tax bill online using a debit or corporate credit card. However, a non-refundable fee applies if you pay with a corporate debit or credit card. Personal credit cards, however, cannot be used.