My Corporation Tax return isn’t due yet. So why is the tax already due?
It sounds backwards. You might reasonably expect to file the return first and then pay the tax. With Corporation Tax, the payment deadline usually comes first.
Two separate dates
For most smaller companies there are two deadlines, and they are months apart:
- Corporation Tax payment: usually due 9 months and 1 day after the end of the accounting period
- Company Tax Return (CT600): due 12 months after the end of the accounting period
So the tax can be due almost three months before the return has to be filed.
An example
Accounting period ends: 31 March 2026
1 January 2027 — Corporation Tax due
31 March 2027 — Company Tax Return due
That catches a lot of business owners out, and the reason is understandable: with most taxes, filing and paying happen together.
Why it matters in cash terms
The filing deadline is simply the latest date by which the return must be submitted. It is not the date to start thinking about how much Corporation Tax you owe.
If Corporation Tax is paid late, HMRC charges late-payment interest from the day after the tax should have been paid until the date it is actually paid. The interest is charged automatically — there is no appeal process for simply having paid late.
So if you wait until the filing deadline before dealing with the tax bill, interest may already have been accruing for nearly three months.
The practical approach
I prefer clients to have a good idea of their Corporation Tax position well before the payment date arrives. That gives you time to:
- Understand what you owe
- Make sure the cash is available
- Plan other spending around it
- Avoid the tax bill becoming an unexpected cash flow problem
In practice that means having the accounts substantially prepared well ahead of the payment date, rather than treating the twelve-month filing window as the working timetable.
Setting the money aside
The simplest protection is a separate account. Corporation Tax is a known, calculable liability — unlike most costs, you can estimate it during the year rather than discovering it afterwards.
If you are reviewing your profit position monthly through management accounts, you have a reasonable running estimate of the eventual bill rather than a surprise nine months after the year end.
It is also worth remembering that Corporation Tax is only one of the calls on the company’s cash. VAT, PAYE and supplier payments compete for the same bank balance, which is why the money sitting there is rarely as available as it looks. That is the heart of cash runway.
In short
The return might not be due yet. The tax can be. And if the tax is paid late, interest follows automatically.
Knowing the difference between the two deadlines saves a lot of last-minute pressure, and usually some money.
If you are unsure when your company’s deadlines fall or what you are likely to owe, book a consultation.
This article sets out general information and is not advice for your circumstances.
