How to pay HMRC 

Corporation tax is payable by limited companies and some organisations like clubs or cooperatives on their taxable income, including trading profits, investment gains and capital gains.

Your corporation tax bill is based on your company’s profits, expenses, and any tax reliefs you’re eligible for.

A company tax return is submitted to HMRC which reports and works out your companies corporation tax liability.

Not paying your corporation tax on time can result in hefty HMRC penalties, interest charges and legal action.

It’s essential to keep track of your tax deadlines and ensure that you pay HMRC the correct amount.

Neglecting to meet your corporate tax obligations can have consequences impacting both the reputation of your business and its financial health.

How do I pay Corporation Tax to HMRC?

As a registered UK company, it’s crucial to know how to pay your corporation tax online. Choose from bank transfer, direct debit, or corporate credit/debit card to make an online payment on the HMRC website. To make an online payment:

  • Select the appropriate method on the HMRC website.
  • Enter your corporation tax reference number.
  • Follow the instructions provided for each specific payment option.

Be aware that some banking institutions may impose fees for certain transactions; therefore, confirm with your financial provider prior to making any payments.

Corporation Tax payment deadlines

Companies should file a company tax return annually within twelve months after their accounting period ends.

If your company owes corporation tax you typically have 9 months and 1 day after the end of your accounting period to pay.

Paying your corporation tax bill on time is crucial to avoid penalties from HMRC. The deadlines for payment depend on the method you choose, such as telephone banking, CHAPS, post office payments, bank transfers, online debit/credit card transactions or BACS.

To prevent late payments:

  • Choose a convenient payment method that suits your needs.
  • Keep track of deadlines based on the chosen method.
  • Be aware of interest charges imposed by HMRC.

Corporation Tax payment methods

There are several payment methods available to pay your corporation tax bill. You can choose the one that suits you best:

  • Telephone banking: Pay by phone using your bank’s telephone banking service.
  • CHAPS: Same-day payment method through your bank or building society.
  • Post office payments: Pay by cash or cheque at the post office.
  • Bank transfers: Transfer funds from your bank account to HMRC’s account.
  • Online debit/credit card transactions: Pay online using your debit or credit card.
  • BACS: Three-day payment method through your bank or building society.

HMRC bank details for online banking and transfers

When paying your corporation tax bill through online or telephone banking, you’ll need specific account details depending on whether you’re using CHAPS or Bacs services.

For Cumbernauld branch transactions use Sort Code 08-32-10 and Account Number 12001039;

while for Shipley branch transactions use Sort Code 08-32-00 and Account Number 12001020.

If making an overseas payment refer to the HMRC’s guidance page. Don’t forget to include your unique 17 character payslip reference number during these transactions to ensure proper allocation of funds.

Bank details for CHAPS services:

Sort Code: 08-32-10

Account Number: 12001039

Bank details for BACS services:

Sort Code: 08-32-00

Account Number: 12001020

Remember accuracy is key when it comes to financial transactions. Double check your account details and payslip reference number before making any payments.

Be vigilant to avoid incurring losses due to errors and be aware of internet  based HMRC corporation tax scams via email and phone.

Corporation Tax penalties and interest charges

Automatic late filing penalties are enforced by HMRC if you don’t file you’re your company tax return on time.

Interest charges are imposed for late or incorrect corporation tax payment.

If your having issues paying your corporation tax on time reach out to HMRC quickly so they can offer you some payment alternatives.

HMRC can help in many cases but they need you to get in touch as soon as you can. You have more options available to avoid penalties and late payment interest charges if you contact HMRC sooner rather than later.

Corporation Tax Return Penalties:

1 day (up to 3 months) late: £100

3 months late: An extra £100

6 months late: HMRC will estimate your corporation tax bill and give you a penalty worth 10% of the unpaid corporation tax.

12 months late: An extra penalty worth 10% of unpaid corporation tax.

What are the Corporation Tax rates?

In April 2023 the UK corporation tax rate increased from 19% to 25% but businesses with profits under £50,000 will still pay at the lower small profits rate (SPR) of 19%, and rates for companies with profits between £50,000 and £250,000 will be tapered.

The tapered nature of the rates applicable to companies with profits between £50,000 and £250,000 means the rate of corporation tax paid gradually goes up from 19% up to a maximum of 25%.

You can use the HMRC marginal relief calculator to estimate how much marginal relief your company could be entitled to.

Filing your Corporation Tax return online

Submitting your corporation tax return online in comparison to post is usually a smoother experience and you’ll be able to confirm its receipt immediately.

Once your return is submitted you’ll get immediate reassurance that HMRC has received it giving you some peace of mind.

HMRC’s online service is pretty user friendly and lets you submit both your limited company’s tax return and accounts simultaneously at companies house.

To make the filing process as stress free as possible you’ll need to have all necessary supporting documents readily available:

  • Prerequisites: Before filing returns through the government gateway portal, register for an account, obtain a unique taxpayer reference (UTR) number, and prepare financial records.
  • Joint Filing: Submit full statutory accounts alongside the CT600 form within your companies filing deadlines to avoid penalties.

Benefits of corporation tax return online filing:

  • Speed: Online filing is faster than traditional paper filing, allowing you to submit your return and accounts in a matter of minutes.
  • Accuracy: Online filing reduces the risk of errors, as HMRC’s system automatically checks for some mistakes and missing information.
  • Security: Online filing is generally secure and encrypted ensuring that your sensitive financial information should be protected.

Getting help with your Corporation Tax

Paying your corporation tax is a legal obligation that you can’t afford to ignore. By following the steps outlined above, you can ensure that you pay your tax on time and avoid any penalties or legal action.

If you’re unsure about how to pay your corporation tax or need help with your tax returns you can seek advice from a qualified accountant or tax advisor.

They can help you navigate the often complex world of corporation tax returns and company accounts and ensure that you comply with all the relevant limited company regulations.

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