07 Jan 2025
Paying Corporation Tax is a legal requirement for businesses in the UK. As a company owner, understanding the methods and deadlines for paying your tax is crucial to avoid penalties and ensure your business operates smoothly. This guide will walk you through the different ways to pay your UK Corporation Tax, including the online money transfer, and the essential deadlines.
Corporation Tax is a tax on the profits of companies in the UK. It is levied on limited companies and other organizations, such as clubs and co-operatives, that make profits. The tax rate varies depending on your business profits. Businesses need to calculate their tax liabilities accurately and submit their payments on time to avoid any fines or interest charges.
You must pay your Corporation Tax within nine months and one day of the end of your accounting period. For example, if your accounting period ends on December 31st, your payment must be made by October 1st of the following year.
There are various methods through which you can pay your Corporation Tax:
This is one of the most commonly used methods. You can pay Corporation Tax through your business’s online banking service. Ensure that you use the correct reference number when making the payment to ensure it is correctly attributed to your account.
Direct debit is another option for businesses that file their tax returns and payments online. This method allows automatic deductions from your bank account. To avoid late payments, set up a direct debit payment well in advance of the deadline.
These bank payment methods are also available. However, CHAPS payments are generally faster and often used when time is of the essence. Faster Payments can be a quick way to send money for Corporation Tax if you're nearing the deadline.
While not as commonly used, you can still pay your Corporation Tax by sending a cheque to HMRC. However, this method is slower and is generally advised against for businesses operating on tight deadlines.
If you're making payments for Corporation Tax from a business account located overseas, you can also make an online money transfer to HMRC's bank account. This method works well for companies that have international operations or foreign subsidiaries. You must use HMRC’s designated international payment reference to ensure your payment is correctly processed.
The deadlines for submitting and paying Corporation Tax are strict, and failure to meet them can result in penalties and interest charges.
Your Corporation Tax return must be filed 12 months after the end of your accounting period.
As mentioned earlier, you must pay Corporation Tax within nine months and one day of the end of your accounting period. The date is set regardless of when you file your return.
If your corporation tax is paid late, you will face interest charges and penalties. The penalties are based on the late payment and can be significant if you do not pay promptly. This is why tracking the deadlines and making timely payments is crucial to avoid additional costs.
In cases where you need to make quick payments for Corporation Tax or any other urgent payments, using services that allow you to send money online can save time and prevent any delays. These services are beneficial for businesses that manage international operations or must make cross-border payments.
Paying Corporation Tax on time is critical for any business operating in the UK. With multiple payment methods available, such as money transfer, online money transfer, and bank transfers, companies have plenty of options to ensure they meet their tax obligations. Always remember to account for the relevant deadlines and ensure that payments are submitted promptly to avoid penalties.
By staying proactive and using efficient payment methods, your business can stay on track and avoid unnecessary complications with HMRC.
No, HMRC does not accept credit card payments for Corporation Tax. Only the payment methods listed, such as online banking or money transfers, are accepted.
If you miss the payment deadline, HMRC will charge interest and penalties. The longer the delay, the higher the charges.
You can track your Corporation Tax payments through your HMRC online account, where you will also find information about the status of your filings.
Yes, you can make money transfer payments from abroad using the appropriate international payment references provided by HMRC.
