How to Pay Your HMRC Corporation Tax: A Simple Guide for UK Businesses

Paying your Corporation Tax to HM Revenue and Customs (HMRC) is a fundamental obligation for all UK companies. This guide will walk you through the payment process, including how to determine your Corporation Tax payslip reference number.

Understanding Corporation Tax Deadlines

Your Corporation Tax payment is due 9 months and 1 day after the end of your accounting period, which typically aligns with your financial year. For example, if your accounting period concludes on 31st March, your payment deadline would be 1st January of the following year. Missing this deadline may result in interest charges from HMRC.

Methods to Pay Your Corporation Tax

HMRC offers several payment methods, each with different processing times:

1. Same Day or Next Day Payments:
   • Online or Telephone Banking (Faster Payments or CHAPS): Use your bank’s online services to transfer funds directly to HMRC. Ensure you use your 17-character Corporation Tax payment reference number. GOV.UK
   • Debit or Corporate Credit Card Payments: You can pay online using a debit or corporate credit card. Note that corporate cards may incur a non-refundable fee. Personal credit cards are not accepted. GOV.UK
2. Payments Taking Up to 3 Working Days:
   • Bacs Transfer: Initiate a Bacs payment through your bank. Processing may take up to three working days. GOV.UK
   • Existing Direct Debit: If you’ve previously set up a Direct Debit with HMRC, you can use it to make payments. Allow three working days for processing. GOV.UK
3. Payments Taking Up to 5 Working Days:
   • New Direct Debit: Setting up a new Direct Debit mandate with HMRC can take up to five working days. Plan accordingly to meet your payment deadline. GOV.UK

Determining Your Corporation Tax Payslip Reference Number

Your 17-character Corporation Tax payslip reference number is essential for ensuring your payment is correctly allocated to the appropriate accounting period. This reference is structured as follows:

• First 10 Characters: Your company’s Unique Taxpayer Reference (UTR).
• Next 4 Characters: Typically ‘A001’, a standard code for Corporation Tax.
• Following 2 Characters: Indicate the specific accounting period, starting with ’01’ for your first period and incrementing sequentially.
• Final Character: Usually ‘A’, a constant in the reference.

For example, a reference might appear as: 1234567890A00101A. You can find this reference:

• On any payslip HMRC has sent you.
• Through your company’s HMRC online account: navigate to ‘View account’ and then ‘Accounting period’ to locate the reference.

Bank Details for Corporation Tax Payments

When making a payment, you’ll need HMRC’s bank details. The account you use may depend on your location and payment method. Commonly used bank details include:

• Sort Code: 08-32-10
• Account Number: 12001020
• Account Name: HMRC Cumbernauld

Always verify the correct bank details on the official HMRC website or through your HMRC online account before making a payment.

Ensuring Timely Payments

To avoid penalties and interest:

• Plan Ahead: Initiate payments well before the deadline, especially if using methods that take several days to process.
• Verify Details: Double-check your payslip reference number and HMRC’s bank details to ensure accuracy.
• Monitor Transactions: Confirm with your bank that the payment has been processed and received by HMRC.

Need Assistance?

Navigating Corporation Tax payments can be complex. If you have questions or require further guidance, don’t hesitate to contact us at help@helpboxuk.com or call us on 02392388003.