UK corporation tax: when to pay, how to pay from overseas, and the mistake Gulf directors make
By Ibrahem Almahawe
Key takeaways for Arab directors
- 1CT payment is due 9 months and 1 day after year end, three months before the CT600 return deadline
- 2Late payment interest runs from the day after the due date, at Bank of England base rate + 4% (7.75% from 9 January 2026)
- 3Use HMRC's current payment instructions and the full 17-character reference for the accounting period, not the UTR alone
- 4If you cannot pay on time, contact HMRC as early as you can, ideally before the deadline, to ask for a Time to Pay plan
Frequently asked questions
- When is UK Corporation Tax due to be paid?
- Corporation Tax must be paid electronically to HMRC 9 months and 1 day after the end of your company's accounting period. This is three months earlier than the deadline for submitting the statutory CT600 tax return (which is 12 months after the period end).
- How can directors living in the Gulf pay UK Corporation Tax to HMRC?
- Non-resident directors can pay by international bank transfer in sterling, using HMRC's overseas bank details on GOV.UK (gov.uk/pay-corporation-tax) and the company's full 17-character Corporation Tax payment reference for the accounting period. Check the transfer's charges and timing before paying, so the money reaches HMRC by the deadline.
- What interest rate does HMRC charge on late Corporation Tax payments?
- HMRC charges late payment interest automatically from the day following the payment due date. The interest rate is set at the Bank of England base rate plus 4 percentage points (standing at 7.75% since 9 January 2026). Interest continues to accrue even if an instalment agreement is active.
- What should you do if your company cannot afford to pay Corporation Tax on time?
- Contact HMRC as early as you can, ideally before the 9 months and 1 day deadline, to ask for a Time to Pay (TTP) arrangement. HMRC agrees monthly payment plans where it is satisfied they are realistic and affordable, and it can agree them for overdue tax too. Interest runs from the day after the deadline either way.
Fileminder’s take, written for Arab UK company directors
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 the Bank of England base rate plus 4% (since 6 April 2025), which made it 7.75% from 9 January 2026. Interest runs from the day after the payment was due until the day it is received. There is no grace period, even for small companies, and it keeps running under a Time to Pay arrangement. 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: use HMRC's current Corporation Tax payment instructions (gov.uk/pay-corporation-tax) for the payment method and the bank account you are paying from, because the instructions for UK and overseas bank accounts differ, and payments from abroad are made in sterling. Use the full 17-character payment reference for the accounting period, from your HMRC notice or reminder or the company's HMRC online account. It changes with each accounting period, so do not construct it from the UTR alone. Check your bank's processing time and charges before paying.
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 as early as you can, ideally before the deadline. HMRC can agree a Time to Pay arrangement, a monthly instalment plan, if it is satisfied the plan is realistic and affordable, and GOV.UK describes these plans for overdue tax too. A company that ignores the debt has no automatic right to a plan, and HMRC's enforcement options include debt collection and, ultimately, closing the company down for unpaid tax.
Written by
Founder of Fileminder, an AAT Licensed Accountant, and author of the eight-book International Taxation Series. Browse the books →
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Disclaimer
General educational guidance only, not legal, tax, accounting, immigration, investment or financial advice. We don't guarantee the information is complete, current or suitable for your situation. Always check official sources (GOV.UK, Companies House, HMRC, the relevant professional body) and speak to a qualified professional before acting. Last reviewed: July 2026.
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