How to Pay Your Corporation Tax Bill

As another Corporation Tax deadline approaches, many business owners are taking the opportunity to strengthen their cash-flow strategy. Instead of paying a large lump sum all at once, businesses can choose flexible payment options that provide greater budgetary control and help to retain more of their working capital.

Whether your bill is larger than expected or you’d prefer to spread the cost, there are flexible ways to pay without disrupting your working capital.

In this quick guide, we’ll break down what Corporation Tax is, who needs to pay it, key deadlines - and the smartest ways to fund your upcoming Corporation Tax bill while keeping your business in a strong position.

What Is Corporation Tax?

Corporation Tax is a tax applied to the profits of limited companies, and certain organisations such as clubs, societies and associations. Unlike self-assessment, the responsibility sits firmly with the company - and the deadlines don’t shift based on cash flow or seasonality.

Your Corporation Tax bill is based on:

• Trading profits

• Investment income

• Chargeable gains

Once you’ve calculated your profit and filed your Company Tax Return (CT600), HMRC sets out exactly how much you owe.

Who Needs to Pay Corporation Tax?

You must file and pay Corporation Tax if you are:

• A limited company registered in the UK

• A foreign company with a UK branch or office

• A club, society, association or similar organisation that is liable for Corporation Tax

If you’re unsure, the rule of thumb is: if you’re incorporated and make a profit, you’re likely required to pay it.

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Corporation Tax: Key Deadlines You Need to Know

What Happens If You Miss Your Corporation Tax Deadline?

Failing to pay Corporation Tax on time can lead to:

• Immediate interest on the unpaid amount

• Penalties for late filing

• Difficulty obtaining credit or future finance

• HMRC enforcement action, including collection agencies or asset recovery

This is why many businesses plan ahead or consider finance options to protect cash flow and avoid issues with HMRC.

Ways to Pay Your Corporation Tax Bill

Here are the most common ways businesses pay their Corporation Tax bill - and the pros and cons of each.

1. Business Loan for Corporation Tax Funding

Using a business loan to pay your Corporation Tax bill allows you to:

• Keep cash free for operations, payroll and growth

• Avoid mixing personal and business finances

• Prevent HMRC interest and penalties

• Spread the cost with predictable monthly repayments

• Access funding quickly - often within 24 hours

Specialists like Millbrook Business Finance can move faster than most banks, giving you time to stay compliant and protect cash flow.

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2. Pay Using Business Cash Reserves

If your business has a strong cash position, paying directly can be the simplest route.

Pros:

• No borrowing costs

• No long-term commitments

Cons:

• Reduces liquidity at a crucial time of year

• Can limit your ability to fund growth, stock or emergencies

Even profitable companies prefer to spread tax bills to avoid draining their cash buffers.

3. HMRC Budget Payment Plan

If you’d prefer to make monthly or weekly payments in advance, HMRC allows you to set up a Budget Payment Plan.

However:

• This must be set up before the deadline

• It’s less helpful if your bill is already due

• It does not guarantee flexibility if cash flow dips

It’s a useful option moving forward, but not ideal for large or unexpected bills right now.

4. Use Personal Borrowing

Some directors use personal credit cards, overdrafts or loans.

However:

• It blurs the line between personal and business finances

• Personal credit risk increases

• Interest rates can be much higher than business lending

• It places personal liability on the director

Most accountants recommend keeping tax obligations strictly within the business.

A Quick Comparison: Ways to Pay Your Corporation Tax Bill

Why Choose a Business Loan to Fund Your Corporation Tax Bill?

A dedicated business loan gives you:

• Cash flow protection: Keep your capital available for wages, stock or growth.

• Guaranteed compliance: Pay HMRC before the deadline and avoid penalties.

• Separation of finances: No personal borrowing or credit risk.

• Quick decisions: Funding can be arranged in 24–48 hours.

• Flexible repayment terms: Tailored to your business performance.

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Typical Business Loan Criteria at Millbrook Business Finance

Here’s what Millbrook usually looks for when funding Corporation Tax bills.

Every case is assessed individually - even if previous lenders have said no.

How Millbrook Business Finance Can Help

Corporation Tax bills can arrive at the toughest time of year. At Millbrook, we offer fast, flexible funding solutions to help you:

• Pay your tax bill on time

• Protect your cash flow

• Avoid unnecessary stress or HMRC penalties

• Keep your business moving forward

Need help funding your Corporation Tax bill?

If you’d like to explore your funding options, our team is here to support you.

Interested in seeing how much you could borrow? Get a quick quote now.

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FAQS

FAQs About Paying Your Corporation Tax Bill

When do I need to pay Corporation Tax?

You must pay Corporation Tax 9 months and 1 day after your accounting period ends.
For companies with a 31 March year-end, the deadline is 1 January. Paying late triggers interest from HMRC.

How do I pay my Corporation Tax bill?

You can pay Corporation Tax by bank transfer, Direct Debit, online banking, debit/credit card, or by using a business loan to spread the cost. HMRC no longer accepts personal credit cards.

What happens if I don’t pay Corporation Tax on time?

If you miss the deadline, HMRC charges immediate interest on the unpaid amount and may take enforcement action. Late filing also triggers penalties and can affect future borrowing.

Can I get finance to help pay my Corporation Tax bill?

Yes. Many businesses use a short-term business loan to pay their Corporation Tax on time. This helps protect cash flow, avoids penalties, and provides predictable monthly repayments.

Can I set up a payment plan with HMRC for Corporation Tax?

You can set up a Budget Payment Plan with HMRC, but this must be arranged before your bill is due. It allows you to pay gradually, but it won’t pause interest on overdue amounts.

Still got questions?

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