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. Your company must file a return if you receive a ‘notice to deliver’ from HMRC. You must still send a return if you make a loss or have no Corporation Tax 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
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. You will receive a ‘notice to deliver’ from HMRC informing you when these payments are due.
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. The back of your payslip, sent to you by HMRC, tells you whether to make the payment to HMRC Shipley or Cumbernauld. If you’re not sure, use Cumbernauld. HMRC will then transfer the payment automatically if necessary.
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It is important to quote your payslip reference number when making the payment. You’ll find the payslip reference on any payslip or correspondence from HMRC regarding your Corporation Tax or through your company’s HMRC online account – choose ‘View account’ then ‘Accounting period’. The reference number is made up of 17 characters, for example 1234567890X12345X.
For more information about the ways to pay, take a look at HMRC’s website or see your notice to deliver from HMRC.