Corporation Tax Payments: Deadlines, Penalties and Instalment Options

A UK limited company must pay its corporation tax nine months and one day after the end of its accounting period, and file its CT600 return within twelve months of that same date. The payment deadline therefore falls three months before the filing deadline, which is the single most misunderstood feature of the regime: you pay before you file.

How much you pay is governed by the corporation tax rates UK 2026 regime, under which profits up to £50,000 are taxed at 19% and profits above £250,000 at 25%, with marginal relief smoothing the rate in between. Missing a payment deadline triggers HMRC late payment interest immediately; missing a filing deadline triggers automatic penalties from £100 upwards.

Blue Tick Accountants, a Guildford-based UK tax advisory and accountancy practice, helps company directors get both dates right and plan the profit level that sits behind them. This article covers the rates, marginal relief, payment and filing deadlines, penalties, and when a company must move onto quarterly instalment payments.

Key Takeaways

• Corporation tax for a UK limited company is due nine months and one day after the end of the accounting period, while the CT600 return is due twelve months after that date.
• The small profits rate is 19% on taxable profits up to £50,000, and the main rate is 25% on profits of £250,000 or more, in the 2026/27 tax year.
• Marginal relief applies between £50,000 and £250,000 of profit and produces an effective marginal tax rate of 26.5% on each additional pound of profit in that band.
• The £50,000 and £250,000 thresholds are divided by the number of associated companies, so a director with two companies has thresholds of £25,000 and £125,000 in each.
• A late CT600 return attracts an automatic £100 penalty, rising to a further £100 after three months, with tax-geared penalties of 10% of unpaid tax once the return is six months late.
• Companies with taxable profits above £1.5 million must pay corporation tax in quarterly instalments, and those above £20 million pay under the very large company regime.

What are the corporation tax rates for a UK limited company in 2026/27?

Corporation tax is charged at 19% on taxable profits up to £50,000, at 25% on taxable profits of £250,000 or more, and at an effective 26.5% on profits falling between those two figures. There is no separate small company return; every company files the same CT600.

The small profits rate 19% band applies only to companies that are not close investment-holding companies. A close investment-holding company, broadly one whose business is holding investments rather than trading, pays the main rate of 25% on all its profits regardless of size. This catches some property investment companies, so check the classification before assuming the small profits rate 19% applies.

Profits for this purpose mean augmented profits: taxable total profits plus exempt distributions from non-group companies. In most owner-managed companies, augmented profits and taxable profits are the same figure. The thresholds are proportionately reduced where an accounting period is shorter than twelve months, so a company with a six-month period has limits of £25,000 and £125,000.

How does marginal relief between £50,000 and £250,000 work?

Marginal relief reduces the 25% main rate liability for companies with profits between £50,000 and £250,000, producing an effective marginal rate of 26.5% on profits within that band. The relief is calculated as the marginal relief fraction of 3/200 multiplied by the difference between the upper limit and the company's augmented profits.

Worked example. Guildford Trading Ltd has taxable profits of £120,000 for the year ended 31 March 2027 and no associated companies. Tax at the main rate is £120,000 x 25% = £30,000. Marginal relief is 3/200 x (£250,000 - £120,000) = £1,950. The corporation tax due is £30,000 minus £1,950 = £28,050, an effective rate of 23.4%.

The 26.5% marginal rate matters enormously for corporation tax planning limited company owners undertake before the year end. Each extra £1,000 of profit earned between £50,000 and £250,000 costs £265 in corporation tax, not £250. Conversely, each £1,000 of additional deductible expenditure, such as an employer pension contribution or advancing a planned equipment purchase, saves £265. That is why the timing of expenditure around the year-end date is worth real money.

For a full overview of this topic, see our guide to corporation tax.

Why do associated companies change the rate you pay?

The £50,000 and £250,000 thresholds are divided by the total number of associated companies, which means holding more than one company can push profits into a higher effective rate. Two associated companies each have a lower limit of £25,000 and an upper limit of £125,000. Four associated companies each have limits of £12,500 and £62,500.

A company is associated with another where one controls the other, or both are under the control of the same person or persons. Control usually follows share ownership, but attribution rules bring in the shareholdings of spouses, civil partners, children and business partners where there is substantial commercial interdependence between the companies.

Worked example. A director owns two trading companies. Company A makes £60,000 of profit and Company B makes £40,000. Each therefore has a lower limit of £25,000 and an upper limit of £125,000, pushing both into the marginal relief band rather than the small profits rate 19%. Company A pays £60,000 x 25% less 3/200 x (£125,000 - £60,000) = £15,000 - £975 = £14,025. As a standalone company it would have paid £60,000 x 25% less 3/200 x (£250,000 - £60,000) = £12,150. The second company costs £1,875 in additional tax on Company A alone.

Dormant companies are ignored, which makes leaving unused companies dormant rather than trading a straightforward piece of housekeeping.

When exactly is corporation tax due and what happens if you pay late?

Corporation tax for a company with profits below £1.5 million is due nine months and one day after the end of the accounting period. For a year ended 31 March 2027, payment is due by 1 January 2028 and the CT600 return is due by 31 March 2028.

HMRC charges late payment interest from the day after the due date until the tax is paid. Interest runs automatically and is not a penalty, so there is no reasonable excuse defence. Where a company pays early, HMRC pays credit interest at a lower rate from the date of payment until the normal due date.

Filing penalties are separate and escalate. A CT600 filed one day late attracts a £100 penalty. Another £100 applies at three months. At six months, HMRC estimates the liability and adds a tax-geared penalty of 10% of the unpaid tax; a further 10% applies at twelve months. Where a return is late three times in succession, the initial £100 penalties increase to £500 each.

A company that cannot pay on time should contact HMRC before the due date to arrange a Time to Pay agreement. Interest still accrues, but HMRC is markedly more accommodating when approached before the deadline than after it.

Which companies must pay corporation tax in quarterly instalments?

A company must pay corporation tax in quarterly instalments where its taxable profits exceed £1.5 million in the accounting period, and under the accelerated very large company regime where profits exceed £20 million. Both thresholds are divided by the number of associated companies.

For a large company with a twelve-month accounting period, instalments fall due on the 14th day of months 7, 10, 13 and 16 following the start of the period. For a year ended 31 March 2027, that means 14 October 2026, 14 January 2027, 14 April 2027 and 14 July 2027. Two payments therefore fall due before the accounting period has even ended, which requires the company to forecast its own profit. Very large companies with profits above £20 million pay four months earlier, on the 14th day of months 3, 6, 9 and 12.

There is a useful year-one exemption: a company entering the large regime for the first time need not pay by instalments if its profits do not exceed £10 million and it was not large in the previous year. Corporation tax planning limited company directors undertake in a rapid growth year should model this threshold carefully, because crossing £1.5 million of profit can pull the first tax payment forward by more than a year.

Frequently Asked Questions

When is corporation tax due for a limited company?

Corporation tax is due nine months and one day after the end of the company's accounting period, provided taxable profits are below £1.5 million. For an accounting period ending 31 March 2027, payment is due by 1 January 2028. The CT600 corporation tax return has a later deadline of twelve months after the period end, in this case 31 March 2028.

What is the corporation tax rate in the UK in 2026/27?

The corporation tax main rate is 25% on taxable profits of £250,000 or more, and the small profits rate is 19% on profits up to £50,000. Profits between £50,000 and £250,000 attract marginal relief, giving an effective marginal rate of 26.5% on each pound of profit within that band.

What is the penalty for filing a CT600 late?

A CT600 filed after the deadline attracts an automatic £100 penalty, with a further £100 once the return is three months late. At six months, HMRC estimates the tax and adds a penalty of 10% of the unpaid tax, with another 10% at twelve months. Returns late three times running raise the initial penalties to £500 each.

Does HMRC charge interest if I pay corporation tax late?

Yes. HMRC charges late payment interest from the day after the due date until the tax is paid in full, and there is no reasonable excuse defence against it. Interest is charged automatically and separately from filing penalties. HMRC pays credit interest at a lower rate where corporation tax is paid before the normal due date.

How do associated companies affect my corporation tax bill?

Associated companies divide the £50,000 and £250,000 profit thresholds between them, which can push a small company into marginal relief or the 25% main rate. Two associated companies each have a lower limit of £25,000 and an upper limit of £125,000. Dormant companies are ignored when counting associates.

When does a company have to pay corporation tax in instalments?

A company must pay corporation tax in quarterly instalments once its taxable profits exceed £1.5 million, divided by the number of associated companies. Instalments fall due on the 14th day of months 7, 10, 13 and 16 from the start of the accounting period. Companies with profits above £20 million pay four months earlier under the very large company rules.

How Blue Tick Can Help

Blue Tick Accountants prepares corporation tax computations and CT600 returns for owner-managed companies, models the 26.5% marginal band before the year end so directors know what an extra pound of profit actually costs, and reviews associated company positions where a director holds more than one company. Where cash is tight, the practice will approach HMRC for a Time to Pay arrangement before the deadline rather than after. Head to our website and book a meeting now.

Conclusion

The payment deadline comes three months before the filing deadline, and interest starts running the day after it passes. Diarise nine months and one day from your period end, model your profit against the 26.5% marginal band before the year closes, and count your associated companies before assuming the 19% rate applies. A company that knows its numbers two months before its year end has options; one that discovers them at the filing deadline has none. Speak to an adviser while there is still time to act.

About the Author

This guide was written by Leon, founder of Blue Tick Accountants, a Guildford-based UK tax advisory and accountancy practice that helps limited company owners, landlords and the self-employed across the UK. Leon advises directors on corporation tax computations, marginal relief planning, associated company reviews and profit extraction. It was last reviewed for the 2026/27 tax year.

This article is intended for general informational purposes only and does not constitute tax, legal, or financial advice. Tax rules are subject to change and their application will depend on your individual circumstances. You should always seek advice from a qualified professional before taking action. Blue Tick Accountants accepts no liability for decisions made on the basis of this content.