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The Payment Deadline vs Filing Deadline
For most UK limited companies, corporation tax is due nine months and one day after the end of the accounting period. The CT600 tax return must be filed within 12 months of the period end. Payment therefore falls three months before the filing deadline — meaning companies that wait until accounts are finalised before paying may already be late and accruing interest on unpaid tax.
Interest accrues on overdue tax from the payment due date at HMRC's late-payment rate, which tracks the Bank of England base rate. The interest is not tax-deductible, so there is a real cost to late payment even before penalties for non-filing are considered.
Large Company Quarterly Instalments
Companies with annual taxable profits above £1.5 million must pay corporation tax in quarterly instalments rather than one lump sum. Instalments are due in months 7, 10, 13, and 16 of the accounting period — meaning the first instalment falls before the period has even ended, based on an estimate of the full year's liability. Underpaying instalments leads to interest charges even if the shortfall is made up promptly.
The threshold is reduced proportionally for short accounting periods and for companies in groups, where the £1.5 million is divided by the number of associated companies. If your business has grown significantly, confirm with your accountant whether instalment obligations have been triggered.
Penalties for Late Filing
HMRC imposes automatic penalties for late CT600 filing. A flat £100 penalty applies from day one of lateness, rising to £200 after three months. Returns more than six months late attract a further penalty of 10% of the unpaid tax; returns more than twelve months late see this rise to a further 20%. These penalties are in addition to late-payment interest.
HMRC can also issue a determination of the tax it believes is due if no return is filed — a figure that is often higher than the actual liability and which the company must displace by filing the actual return. Filing even an estimated return on time is better than filing nothing.
Planning Around the Timeline
Good planning involves setting aside estimated corporation tax as a liability throughout the year rather than treating retained profit as freely available. A simple approach is to reserve a proportion of net profit each month — your accountant can advise a realistic percentage given your cost structure and expected reliefs. This avoids a large cash demand nine months after the year end when the payment falls due.
R&D tax credits, capital allowances, and trading losses can all reduce the tax bill materially. These reliefs are claimed through the CT600 and must be supported by adequate records. Quantifying reliefs well before the payment deadline allows the company to reduce its payment accurately rather than overpaying and waiting for a refund.
Frequently asked questions
What if our accounts are not ready by the CT600 deadline?
The CT600 filing deadline is fixed at 12 months after the period end regardless of whether your statutory accounts are finalised. You can file the CT600 based on provisionally prepared figures and amend it later — but filing late to wait for perfect accounts is not an accepted excuse for HMRC.
Can we carry back a loss to reclaim corporation tax paid in a prior year?
Yes. A trading loss can be carried back up to 12 months (or three years under temporary provisions) to reclaim tax paid in profitable years. The claim is made on the CT600. Timing matters — carry-back claims must be made within two years of the loss period end. Confirm the mechanics with your accountant.
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