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Late Corporation Tax Payment?

Licensed UK Insolvency Practitioners FREE Meeting for Company Directors

We can help with serious company debts, HMRC and creditor pressure, VAT/PAYE/Tax arrears, cashflow problems and raising finance.

Late Corporation Tax: What to Do When You Can’t Pay Corporation Tax on Time

Before even thinking about what will happen if your company can’t pay corporation tax, you also need to keep in mind that there are other taxes which are probably late at the same time! Being late on some of the others may allow for a bit of ‘grace period’ or being under ‘surcharge notice,’ but not so with corporation taxes! The day after they are due, penalties start accruing, and unfortunately, you may have other debts building up as well. When the deadline approaches and you see that you can’t afford to pay corporation tax, call us so that we can help you avoid being penalised.

As corporation tax is only payable 9 months after an companies year end, it is difficult for directors to be surpised by the amount or date it needs to be paid.

Deadlines and Taxable Profits

There are actually two different rules for determining when your corporation taxes are due. A company that has profits which are taxable of up to £1.5 million have nine months plus a day after the end of the accounting period for their corporation tax. On the other hand, a company whose profits are greater than £1.5 million have a shorter deadline and it is normal to pay corporation taxes in four instalments. When instalments are in question, it is imperative to plan accordingly so that each payment can be made timely. Late corporation tax will be penalised whether it is due in one lump sum or in instalment payments.

Making Arrangements with HMRC before Paying Corporation Tax Late

Before paying corporation tax late, it is better to work out payment arrangements with HMRC so that penalties can be avoided if at all possible. Since taxable profits play a heavy role in how long you have to make payment, it may be in your best interest to consult with accountants or insolvency specialists before contacting HMRC. In fact, Real Business Rescue can work with you when negotiating payment arrangements because we understand how government works. We can help you avoid being overoptimistic on what you can afford to pay when setting up instalments because we do a thorough analysis of your cash flow forecasting. 

Is Funding a Viable Alternative to a Late Payment Corporation Tax Penalty?

Depending on the amount of money you will need to avoid paying corporation tax late, it may be possible to arrange funding in order to make the payment on time. Even if you can't pay corporation tax due to poor cash flow at the moment, perhaps you can get a loan against assets or your debtor book. More and more businesses are increasing cash flow for day to day expenses and to avoid interest on corporation tax paid late with such funding measures as invoice factoring or confidential invoice discounting. Trade finance and small business loans may also be options, but the first order of business is to determine what is causing the lack of operating capital.

Of course you can always contact HMRC directly through their help line but the taxman isn't likely to take the time to go over your books with you and your business model to see what has gone wrong. What you can accomplish in many cases is setting up some kind of payment plan but is this a realistic expectation when future profits are in question? Insolvency specialists at Real Business Rescue are expert in finding solutions to current cash flow problems whilst helping you budget for the future with realistic goals. Keep in mind that there will be HMRC interest on late payment of corporation tax so our goal is to help you avoid that.

Give us a call for a free consultation so that we can help you avoid paying corporation tax late, or at the very least, mitigate the penalties.


Who we help

  • Company Directors
  • Finance Directors
  • Sole Traders
  • Accountants
  • Small Businesses
  • Large Businesses
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Contact our team

Jonathan Munnery
Andrew MacKenzie
Julie Palmer
Thomas Mckay
Keith Tully
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Licensed Insolvency Practitioners