If you’re running a business in the UK, you must know when to pay Corporation Tax to stay on the right side of the law and avoid penalties from HMRC. It might sound complicated, but getting it right is crucial for your business.
Corporation Tax, also called company tax, can be tricky to navigate due to constant changes in regulations. Staying informed about how it works and how it affects your business is essential.
Expert team of SAS takes the hassle out of tax management, helping you stay compliant while minimising your tax burden. Let us take care of your accounting, so you can focus on growing your business!
How to Register for Corporation Tax in the UK?
When starting a business, one of the first steps is registering for Corporation Tax with HMRC. You must complete this within three months of beginning any business activities, such as:
- Selling goods or services with the intent to make a profit
- Managing investments
- Earning interest
- Advertising your business
- Leasing or buying property for business use
- Hiring staff
- Selling assets for a profit (chargeable gains)
- Earning any other income through your company
Now, when do you pay Corporation Tax? After registration, HMRC will provide you with your tax deadlines.
How to Register Online?
The easiest way to register is through HMRC’s online service. You’ll need to sign into your business tax account (or create one) and provide:
- Your Unique Taxpayer Reference (UTR), which HMRC sends to your registered address within 14 days of company formation
- Your company registration number (found on your certificate of incorporation)
- The start date of your business activities (the first date of your accounting period for Corporation Tax)
- Your accounting reference date (the end date of your company’s financial year)
- Your business address
- The nature of your business activities
- Details of each company director, including name and residential address
Once registered, HMRC will inform you about your Corporation Tax payment deadlines and filing requirements.
Understanding Corporation Tax Deadlines and Penalties
Knowing your Corporation Tax deadlines is essential for staying compliant and avoiding penalties from HMRC. In the UK, the deadline to file your Corporate Tax return is 12 months after the end of your accounting period. However, when do you pay Corporation Tax? The payment deadline is usually 9 months and 1 day after your accounting period ends. Large companies may need to make payments in installments, even during the accounting year.
Penalties for Late Filing
Filing your Corporation Tax return late can be costly:
- 1 Day Late: £100 penalty
- More Than 3 Months Late: Another £100
- More Than 6 Months Late: 10% of unpaid tax
- More Than 12 Months Late: Additional 10% of unpaid tax
If your return is late three times in a row, the £100 penalties increase to £500.
Penalties for Late Payment
Missing the payment deadline can lead to interest charges and serious consequences, including:
- Debt collection agencies getting involved
- Money being recovered directly from your bank
- Seizure of assets
- Legal action
- Even company liquidation in severe cases
If you can’t pay on time, contact HMRC as soon as possible. They may offer a payment plan to help you manage your tax bill.
Let SAS handle your taxes, so you never miss a deadline. We ensure compliance and help you avoid costly mistakes—giving you peace of mind to focus on growing your business!
Who Is Responsible for Paying Corporation Tax in the UK?
In the UK, Corporation Tax is paid by businesses on their profits, including limited companies, international businesses with UK branches, and various organisations like associations, clubs, and societies.
Limited companies must pay Corporation Tax on their annual profits, whether from trading, selling assets, or investments. If a foreign business earns profits in the UK, it also needs to pay Corporation Tax. Even clubs and societies that earn from business activities are required to pay.
It’s crucial to know the deadlines to avoid penalties. The tax must be paid 9 months and 1 day after the end of the accounting period, while the return itself is due within 12 months.
Who Makes Sure Corporation Tax Is Paid?
It’s the responsibility of the company directors to ensure that the tax is calculated correctly, paid on time, and reported properly. Missing the deadline can result in hefty fines and interest charges.
We take stress out of compliance by managing your tax responsibilities efficiently, so you can focus on growing your business without worrying about deadlines or penalties!
Wrap Up
Understanding when to pay Corporation Tax and meeting deadlines is crucial for every business operating in the UK. Staying compliant not only helps you avoid penalties but also keeps your business on the right track. Managing Corporation Tax can be challenging, but with the right support, you can focus on growing your business without worrying about complex tax regulations.
Let SAS KPO Services Handle Your Tax Needs!
Say goodbye to tax worries and focus on what you do best to grow your business! Our expert team at SAS will manage your Corporation Tax, ensuring compliance and maximising tax efficiency.
Contact Us Today!
Get in touch with us for reliable tax management solutions. Let us handle the numbers while you achieve success!
Shivani Soni (HR and Digital Marketing Specialist) writes this blog
