UK corporation tax: when to pay, how to pay from overseas, and the mistake Gulf directors make

UK corporation tax operates on two separate deadlines and most Arab directors get them confused. The corporation tax return (form CT600) must be filed with HMRC within 12 months of your company's accounting period end. The actual payment of any corporation tax owed is due 9 months and 1 day after the accounting period end — three months earlier than the return deadline. If your company's year end is 31 March, your CT payment is due 1 January the following year, and your CT600 is due 31 March.

Paying late triggers automatic interest charges. HMRC's late payment interest rate is currently set at the Bank of England base rate plus 2.5%, which at current rates puts it above 7%. Interest runs from the day the payment was due until the day it is received. There are no payment plans or grace periods for small companies — the interest accrues from day one. For a company with £20,000 of unpaid corporation tax, a six-month delay costs over £700 in interest alone.

How to pay from the Gulf: HMRC accepts payment by CHAPS or BACS bank transfer. Their sort code is 08-32-10, account number 12001004, account name HMRC Cumbernauld, with your 17-character payment reference (your UTR followed by the letter A). SWIFT payments are accepted — the bank is Barclays, BIC BARCGB22. Wise (formerly TransferWise) works reliably for this payment and avoids the currency conversion charges of Gulf banks. Allow three to five business days for international transfers to clear.

Large companies with annual profits above £1.5 million pay corporation tax in quarterly instalments during the accounting year itself — six months and 13 days, nine months and 13 days, twelve months and 13 days, and three months and 14 days after year end. Most Gulf directors with small UK companies will not be subject to quarterly instalments, but it is worth confirming with your accountant once profits approach that threshold.

What happens if you cannot pay: contact HMRC's Business Payment Support Service before the deadline, not after. HMRC does offer Time to Pay arrangements — a structured instalment plan — but these must be agreed in advance. A company that simply misses the payment date without contact has no automatic right to a plan, and HMRC's enforcement options include debt collection proceedings and, ultimately, initiating compulsory liquidation of the company for unpaid tax.