How to register for and pay Corporation Tax in the UK

Introduction

When you start a limited company in the UK, Corporation Tax (CT) is one of the main payments you'll make to HMRC. It’s crucial to understand when and how to register for the tax, and how to pay it correctly and on time. This guide for new business owners, directors, or first-time filers explains your legal requirements around Corporation Tax, and shares expert compliance tips to help you manage your business tax efficiently. Understanding these rules helps you avoid costly penalties and stay focused on growing your new business from day one.

What is Corporation Tax and who pays it?

Corporation Tax (CT) is charged on the profits of:

• UK limited companies
• Foreign companies with a UK branch or office
• Clubs, co‑operatives or other unincorporated associations

The business or entity pays the levy, not you personally as an owner.

Sole traders and partnerships aren’t liable to Corporation Tax. Instead, they pay tax on their income through Self Assessment returns.

CT rates in 2025/26 range from 19% to 25%, depending on your profit level.

How to register for Corporation Tax

When you incorporate, HMRC is automatically notified and creates a Corporation Tax record for your business. It will send a letter to your registered address to confirm this.

You then need to register the company for CT online through your Business Tax Account (BTA). If your company won’t be trading, you can tell HMRC it is dormant – the Revenue will then usually confirm you don’t need to file a Corporation Tax return or pay the tax.

Setting up for Corporation Tax in your BTA lets you manage the tax online, including filing returns and paying what you owe. You must set it up within three months of starting to trade, for example if you:

• Buy and sell goods to make a profit
• Conduct professional activity
• Provide services
• Manage investments
• Receive any other income or interest

There is a different Corporation Tax registration process for:

• Non-UK companies
• Unincorporated associations

What you’ll need

To activate Corporation Tax services, you’ll need:

• Your company’s registration number
• The date you started doing business, which is also the start of your first accounting period
• The date your first accounts are made up to
• Your company’s 10-digit Unique Taxpayer Reference (UTR), which appears on any letter from HMRC

How to activate your account

Check your registered office address is correct as this is where all letters are sent. If you need to update the address, tell Companies House.

1. Sign in to your BTA using your Government Gateway user ID and password. If you don’t have an ID, create one when you sign in.
2. Select “Services you can add”, or “Add a tax”
3. Find the Corporation Tax service and choose “Enrol for service”

HMRC will send you:

• Your Corporation Tax activation code within 10 days, or 21 days if you live abroad
• Instructions for enrolling
• The deadline for paying your company tax

You can request a new activation code if you do not receive one or if your code has expired. HMRC will send you one by post to your registered office.

When and how to pay Corporation Tax

You must pay your Corporation Tax nine months and one day after the end of your accounting period. For example, if your period ends on 30 April 2025, payment is due by 1 February 2026.

You need to calculate the amount you owe on your Company Tax Return (CT600), and file the return by a separate deadline, 12 months after the end of your accounting period. In the same example, the filing deadline would be 30 April 2026. Most businesses complete the return soon after their year-end to ensure they know their liability well in advance of the deadline.

You pay your Corporation Tax bill directly to HMRC using one of its payment methods:

• Online or mobile banking
• Direct debit
• Debit or credit card
• Cash or cheque at a bank or building society

So HMRC knows which tax you’re paying, use your CT payment reference. It’s a 17‑character number that changes with each accounting period. You can find it on your notice to deliver a tax return or your company’s HMRC account.

Companies with taxable profits above £1.5 million have separate rules and deadlines.

Penalties for non-compliance

Failure to notify Corporation Tax liability

If your company has Corporation Tax to pay but you don’t receive a notice to deliver a Company Tax Return, you must still tell HMRC you owe the tax. You must do this within 12 months of the end of your CT accounting period. HMRC charges penalties if you fail to do this.

An example is a company that starts trading but fails to activate its Corporation Tax account or file a Corporation Tax return within the deadlines.

If you think this may apply to you:

• Make sure you’re Corporation Tax registered and your account is set up
• Bring all returns and payments up to date
• Keep clear evidence of when you started trading and how you calculated profits, so you can answer any HMRC queries quickly.

Late returns

If your Corporation Tax Return is late, HMRC can impose financial penalties:

• One day late – £100 automatic fine
• Three months late – additional £100 fine
• Six months late – 10% of your outstanding tax bill
• 12 months late – extra 10% of your outstanding tax bill

If you miss the deadline three years in a row, the £100 penalties automatically increase to £500 each.

Late payments

If your Corporation Tax payment is late, HMRC charges daily interest on the unpaid amount from the due date until you pay it in full. This interest is on top of any penalties for filing your return late. Check the late payment interest rate, which is 7.75% as of 9 January 2026.

Helen Wood, Technical Content Writer at TaxAssist, says: “If you know you will be unable to pay your Corporation Tax bill on time, contact HMRC without delay – you may be able to organise a payment plan and reduce interest costs.”

Concerned you'll be paying out a large lump sum to HMRC on the day your Corporation Tax is due? To ensure you have enough to cover this, Wood recommends setting up a separate, ringfenced bank account to save for it throughout the year.

Can I use personal funds to pay Corporation Tax?

Yes, but it will be a personal donation or loan (through your director’s loan account), so you need to treat it as such in your company’s records. The liability still belongs to the business, so the payment should appear as the company settling its Corporation Tax bill – funded by you – not as a personal tax payment.

What’s the difference between using accounting software and paying HMRC directly?

Using commercial software for CT does not change how you pay the tax. But it can change how you file the return and initiate the payment.

Commercial software can help you prepare and file your CT600 and accounts in the correct format, then submit them to HMRC and Companies House. This avoids having to rekey the information into HMRC’s web forms.

Some products provide a payment link or bank feed. But the payment still goes to HMRC’s bank account, via one of its approved methods, in the same way it would if you were paying your tax directly.

Practical tips to stay compliant

Ensure you’re registered for Corporation Tax at the same time as forming your company. You won’t then have to worry about doing it later or risk a “failure to notify” penalty. Don’t forget to activate Corporation Tax in your business tax account after that if you’re trading.

As soon as you’re set up for Corporation Tax, check your accounting period dates and deadlines for returns and payments, then diary them so you won’t forget.

If your company is dormant, monitor it closely for any business activity – such as signing contracts, charging rent, or earning bank interest – as HMRC will treat this as “trading” and could require you to file a Corporation Tax Return.

Make sure you use your company UTR, a mandatory 10-digit number issued by HMRC to all new limited companies. It is your company’s identification number for all tax matters, and you’ll need it to register for and pay Corporation Tax, and to file returns. Don’t use your personal UTR, which is a separate number.

Your 10-digit company UTR is the first part of the 17-digit reference you use when paying Corporation Tax.

Corporation Tax checklist

1. Confirm registration – once you’ve formed your company, wait for your letter from HMRC containing your 10-digit UTR.
2. Activate your account – sign in to your Government Gateway and enrol for Corporation Tax using your UTR and other company details.
3. Diary your deadlines – your Corporation Tax payment is due nine months and one day after your year-end. Your return is due 12 months after.
4. Ringfence your tax – set aside a percentage of your profits throughout the year in a separate bank account so you aren't caught short.
5. Prepare your CT600 – use accounting software or a professional to calculate your profits and file your Company Tax Return well before the payment deadline.
6. Make your payment – pay HMRC using your period-specific payment reference for your accounting period.
7. Stay active or declare dormant – if you stop trading, notify HMRC. Otherwise, monitor for any activity (like earning interest) that could trigger a tax filing.

Efficiency and organised record-keeping are key

Navigating Corporation Tax might feel daunting when you start out, but once you’ve registered and set up CT in your business tax account, it’ll soon be part of your annual routine. Staying organised, using accounting software, and keeping clear, up-to-date digital records help ensure your company stays compliant.

Ready to register your company? 1st Formations makes it quick and easy to get your business off the ground with expert support every step of the way.