Each year when your company accounts are prepared, a Corporation Tax return (CT600) is filed with HMRC detailing the tax payable for the company financial year. Shortly after the CT600 has been filed, HMRC will send you a statement showing the amount due and details of how to pay.
The deadline to make the Corporation Tax payment is 9 months after the end of your company financial year, unless you are in your first year of trading: in which case please see the next section. You can make the payment before the deadline if you prefer.
When our team files your CT600 a pending payment will appear in your Bookkeeping area that shows the amount due and the payment deadline. It will remain there until you process the payment, at which point you can mark it as paid.
Corporation Tax for 1st year of trading
A Corporation Tax accounting period can’t be longer than 12 months. This means that in your first year of trading your company must file two Company Tax Returns because you’ll have two Corporation Tax accounting periods. This is the case even though you only need to file one set of accounts at Companies House.
- The first accounting period covers the first 12 months, i.e. starting from the date your company was incorporated.
- The second accounting period covers the rest of the time, i.e. starting from the end of the 12 month period above, running to the end of the month.
For example, if your company was incorporated on 10th August 2016, your Corporation Tax accounting periods would be:
- 10th August 2016 to 9th August 2017 (12 months)
- 10th August 2017 to 31st August 2017
When the two returns have been filed you will receive two statements for each Corporation Tax return period. These must be paid to HMRC as separate payments using the unique reference number for each payment.
Ensure that with each payment you quote the reference number shown on the HMRC statement you are paying the balance of. The reference numbers are different on each payslip as they relate to the different accounting periods.
The deadlines for these payments are 9 months after the accounting period ends therefore for the 1st accounting period in the example above, the deadline would be 9 months after 9th August. The second payment deadline would be 9 months after 31st August. It is therefore simpler to make both payments on or before the earliest of your deadlines. In subsequent financial years only one Corporation Tax return will need to be filed.
How to pay
The recommended payment method is to use online banking by selecting ‘HMRC Corporation Tax’ from your banks beneficiary / payee list. If your bank does not list HMRC as a beneficiary / payee, you can enter HMRC’s bank details below.
To determine if you need to make the payment to Shipley or Cumbernauld (take care not to mix up with PAYE Shipley / Cumbernauld), you can refer to the back of your Corporation Tax statement. Although on the reverse of the statement it doesn’t state Shipley or Cumbernauld, you can determine which one to use by the bank account number:
|Accounts office||Sort code||Account number|
If you are unsure which Accounts Office to pay you should make the payment to Cumbernauld. HMRC will then transfer the payment automatically if necessary.
It is important to quote your reference number when making the payment. The reference number to use is shown on your Corporation Tax statement which is made up of 17 characters, for example 1234567890X12345X. You can check you have the correct reference by referring to any correspondence you have received from HMRC about your Corporation Tax.
For more information about the ways to pay, take a look at HMRC’s website or see the reverse of your Corporation Tax statement / payment letter.