Our Contractor's Guide to Corporation Tax Deadlines
Our Contractor's Guide to Corporation Tax Deadlines
There's no denying that setting up a limited company for contracting is a big responsibility, especially when it comes to keeping on top of tax. Not only do you need to think about paying Income Tax as a self-employed contractor, you need to pay Corporation Tax as a business. Tax deadlines might not be the first thing on your mind when you're running a business, but they can't be overlooked. In fact, keeping on top of Corporation Tax obligations is one of the most important responsibilities of a company director.
Missing a deadline doesn't just mean paperwork headaches and stress, it can also lead to hefty penalties, added interest charges and even HMRC scrutiny. That's why, at Go Limited, we're here to help. We've broken down exactly what you need to know about Corporation Tax, the deadlines to remember, the penalties for getting it wrong and strategies to make compliance simple.
Limited Company Contracting: What is Corporation Tax?
When you own a business in the UK, you need to pay attention to a lot of things, such as IR35 and HMRC regulations, but Corporation Tax is the big one. This is a tax that's charged on the profits that your limited company makes. Whereas Income Tax is a personal tax that employees and self-employed individuals pay on salary and dividends, Corporation Tax is paid by the business itself.
It's calculated based on the income your business makes from providing services - as a contractor, this means your contracting work - and any investment income your business earns. Chargeable gains are also factored in, which is important if your business sells assets, such as equipment or property. All of this is added together and Corporation Tax is calculated based on the total, minus allowable expenses that you're allowed to deduct.
Whereas employees have Income Tax deducted automatically though PAYE, limited company contractors are responsible for working out how much Corporation Tax is due. You need to report it to HMRC and pay it on time. This is done via a Company Tax Return.
Corporation Tax Rates Limited Company Contractors Need to Know
There's a tiered system of Corporation Tax rates and, as a contractor, it's important to know where you fall. If your limited company's annual profits are £50,000 or less, you have to pay the small profits rate of 19%. If your profits are more than £250,000 then you fall into paying the main rate of 25%. There's also a marginal relief rate which applies for profits between £50,001 and £250,000, and it gives a tapered increase from 19% to 25%.
Don't assume that you'll always be on the small profits rate, as all it takes is one lucrative contract and your profits could be higher than expected, meaning you have to pay a higher rate of Corporation Tax. This is why it's important to regularly review your earnings, so you don't get caught out with a bigger tax bill than planned.
Corporation Tax Penalties and Interest
There are strict deadlines for Corporation Tax and missing a key payment date can result in penalties and interest, so it's no laughing matter. It's not a small mistake to make, as it could cost you greatly in terms of stress and fines, not to mention the inconvenience of adding something else to your plate. HMRC enforces strict penalties and these increase the longer the delay. So, if you do miss a Corporation Tax deadline, it's important to pay as soon as you can.
If you file your Corporation Tax Return late, you will be given a fine of £100, even if it's only 1 day late. If it remains unfiled for 3 months, another £100 fine will be added. After 6 months, HMRC estimates your tax bill and adds a penalty of 10% of the unpaid tax, with another 10% being added if your Corporation Tax isn't sorted after 12 months. All of this quickly adds up, making your Corporation Tax bill significantly higher than it would have been had it been paid on time.
HMRC can apply harsher penalties if you're a repeat offender. For example, if you consistently file late - which HMRC considered to be 3 times or more in a row - the £100 fines increase to £500 each.
Key Corporation Tax Deadlines for Contractors
As a limited company contractor, there are two key Corporation Tax dates you need to remember.
Corporation Tax Payment Deadline
You need to pay Corporation Tax no later than 9 months and 1 day after the end of your accounting period.
Company Tax Return Filing Deadline
You need to file your Corporation Tax Return within 12 months of your accounting period ending.
If you're a new contractor, you need to register for Corporation Tax within 3 months of starting to trade. HMRC will not remind you, and it's your responsibility as a limited company director to remember.
Frequently Asked Questions About Corporation Tax Deadlines
1. What is Corporation Tax and who needs to pay it?
Corporation Tax is a tax that limited companies in the UK must pay on their profits. This includes income from trading, investments, and the sale of assets such as property or shares. If you operate as a limited company contractor, you are legally required to pay Corporation Tax on your company's profits after deducting allowable business expenses and salaries. Sole traders and partnerships don't pay Corporation Tax — instead, they pay Income Tax through Self Assessment.
2. What are the Corporation Tax deadlines for limited companies?
There are two key deadlines to remember:
Corporation Tax payment: due 9 months and 1 day after the end of your accounting period.
Company Tax Return (CT600) filing: due 12 months after the end of your accounting period.
For example, if your accounting period ends on 31 March 2025, your Corporation Tax payment must reach HMRC by 1 January 2026, and your tax return must be filed by 31 March 2026. Keeping these dates in mind helps you avoid late payment penalties and interest charges.
3. Can I pay Corporation Tax in instalments?
Most small and medium-sized companies pay Corporation Tax in one lump sum. However, large companies — generally those with taxable profits above £1.5 million — may need to pay in quarterly instalments. These payments start in the seventh month of the accounting period and continue every three months thereafter. For smaller contractor limited companies, paying in instalments is usually unnecessary.
4. How do I pay Corporation Tax to HMRC?
You can pay your Corporation Tax using several secure methods:
Online banking (Faster Payments, CHAPS, or Bacs)
Debit or corporate credit card through HMRC's online portal
Direct Debit (if already set up with HMRC)
At your bank or building society using a payment slip provided by HMRC
Always allow enough time for payments to clear. Faster Payments typically arrive the same day, while Bacs can take up to three working days. HMRC will consider your payment received on the date it reaches their account — not when you send it.
5. When do I need to file my Corporation Tax return?
You must submit your Company Tax Return (CT600) to HMRC within 12 months of the end of your company's accounting period. This return summarises your income, expenses, and how much Corporation Tax you owe. Even if your company made no profit, you are still required to file the return on time. Filing is done online using HMRC-approved software or through your accountant.
6. What happens if I miss the Corporation Tax deadline?
Missing the deadline for filing or paying your Corporation Tax leads to automatic penalties:
1 day late: £100 fine
3 months late: additional £100 fine
6 months late: HMRC estimates your tax bill and adds a 10% penalty
12 months late: another 10% added
Repeated late submissions within 12 months increase the initial fines to £500 each. Late payment also triggers interest charges, which continue to build until your balance is cleared.
7. What if my company made no profit or had no income?
Even if your company made no profit, you must still file a Company Tax Return and report that you owe no tax. You won't have to make a payment, but the filing obligation remains. If your company is temporarily inactive or "dormant," you can inform HMRC so they know not to expect a return until trading resumes.
8. Can I change my company's accounting period?
Yes — companies can change their accounting period, though certain restrictions apply.
You can:
Shorten your accounting period as often as you like.
Lengthen it only once every five years.
If you change your accounting period, your Corporation Tax deadlines will also shift accordingly. For example, if you extend your period by three months, your payment and filing dates move forward by the same amount. Always notify HMRC through your company's online account if you make any changes.
9. What records should I keep for Corporation Tax purposes?
HMRC requires businesses to maintain accurate financial records for at least six years. This includes:
1. All invoices (sales and purchases)
2. Receipts and expense claims
3. Bank statements and loan agreements
4. Payroll and dividend records
5. VAT returns and correspondence with HMRC
Keeping detailed records ensures you can justify your tax calculations if HMRC requests evidence during an enquiry or audit. Many contractors use cloud accounting software to make this process simpler and to store receipts digitally.
10. How can I legally reduce my Corporation Tax bill?
There are several legitimate ways to reduce your Corporation Tax liability:
1. Claim all allowable business expenses, such as office costs, insurance, travel, and professional subscriptions.
2. Make pension contributions through your limited company.
3. Purchase necessary business equipment, such as computers or tools, which qualify for capital allowances.
4. Claim R&D tax relief if you work on innovative projects.
5. Pay yourself a mix of salary and dividends in a tax-efficient way.
An experienced accountant can help you identify all the reliefs and deductions available to ensure you never pay more than necessary.
11. What are the penalties for incorrect or late Corporation Tax payments?
If you submit inaccurate figures or underpay your Corporation Tax, HMRC may charge penalties depending on the reason for the error:
1. Careless mistakes: up to 30% of the unpaid tax
2. Deliberate but not concealed errors: up to 70%
3. Deliberate and concealed errors: up to 100%
HMRC takes a lenient approach if you correct the issue quickly and cooperate fully, but repeated or deliberate non-compliance can trigger investigations or audits.
12. What should I do if I can't afford to pay my Corporation Tax on time?
If you're struggling to pay your bill, contact HMRC as soon as possible. You may be able to set up a Time to Pay arrangement, allowing you to spread the cost over several months or even a year. Avoid ignoring the situation — late payment without communication can lead to penalties and debt recovery action.
13. How do I find my Corporation Tax reference number?
Your Unique Taxpayer Reference (UTR) is a 10-digit number issued by HMRC when you register your company. It appears on all official correspondence, including your "Notice to deliver a Company Tax Return." You'll need this number whenever you pay Corporation Tax or file your return online.
14. What is the current Corporation Tax rate in the UK?
As of the 2025/26 tax year, the main Corporation Tax rate is 25% for companies with profits over £250,000. Companies with profits below £50,000 pay the small profits rate of 19%, while profits between £50,000 and £250,000 are taxed at a tapered rate. Most small contractor limited companies fall into the 19% bracket.
15. How can contractors stay on top of Corporation Tax deadlines?
Here are some practical tips:
1. Use accounting software to track income, expenses, and deadlines.
2. Set calendar reminders for key tax dates.
3. Hire an accountant who specialises in contractor finances.
4. Regularly review your accounts so there are no surprises when the tax bill arrives.
5. Keep a portion of your income aside each month for tax payments — around 19–25% depending on your profit level.
Staying organised ensures you avoid unnecessary stress, penalties, or last-minute rushes at year-end.
Important:
Please note: Any rates and thresholds mentioned in this article are correct at the time of publishing and may be subject to change.
When choosing an accountant, look for one with proven experience and expertise in the contracting sector, particularly around areas like IR35, limited company tax matters and off-payroll working. Formal qualifications are important, but relevant hands-on knowledge matters just as much — especially in a complex and fast-changing landscape like this.
