When does a company have to pay it’s Corporation Tax bill?

As a company owner, it is essential to ensure that you understand your company’s tax obligations. One of these critical obligations is paying corporation tax. Corporation tax is a tax paid by all limited companies and certain organizations operating in the UK. However, many business owners are unsure about when they need to make these payments. In this blog post, we will explore the question of when does a company have to pay it’s Corporation Tax bill?

Different deadlines for paying Corporation Tax

When it comes to paying corporation tax, there are specific deadlines that you must meet. For example, if your company’s taxable profits are below £1.5 million, you are required to pay your corporation tax nine months and one day after the end of your accounting period. However, this is different if your company’s taxable profits exceed £1.5m. Then you are required to pay your corporation tax in quarterly installments throughout the year.

It is also important to remember that corporation tax is calculated based on your company’s profits for the current accounting period. If your company’s profits increase or decrease in the following accounting period, the corporation tax for that period will be adjusted accordingly. It is also worth noting that there may be changes to your corporation tax payment deadline. This happens if your company’s accounting period changes.

What happens if you don’t pay it on time?

If you fail to pay your corporation tax on time, you will be subject to penalties. The amount of the penalty will depend on how late the payment is. Also, it will depend on the size of your company’s taxable profits. For example, if you are two months late in paying your corporation tax, you will receive a penalty of 2.5% of the outstanding amount. If the payment is more than six months late, you will receive an additional penalty of 5% of the outstanding amount. Therefore, it is essential to ensure that you make your corporation tax payments on time. Or you could be facing costly penalties.

It is a good idea to keep accurate and up-to-date records of your company’s finances. This is to ensure that you do not miss your corporation tax payment deadlines. This record-keeping should include details of all income, expenses, and assets and should be updated regularly. It is also worth considering working with an accountant or tax advisor who can help you to manage your company’s tax obligations. They can also ensure that you meet all the necessary deadlines.

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In summary, paying corporation tax is an essential part of running a business in the UK. As a business owner, it is your responsibility to ensure that you meet the required payment deadlines. This ensures you avoid penalties or interest. You can ensure that you meet your corporation tax payment obligations and avoid any costly penalties. This can be done by keeping accurate records of your company’s finances. Also by working with a tax advisor and understanding the different payment deadlines. Remember, keeping up to date with your corporation tax payments will contribute to the success of your business in the long run. For more information on when does a company have to pay it’s Corporation Tax bill? please call us on 01494 611 462 to speak to a member of our team.