A profitable year does not always leave enough cash in the bank to pay the tax bill. For a small UK limited company, setting aside money throughout the year is usually easier than finding a lump sum close to the deadline. Here is a practical way to plan.
1. Separate the payment date from the filing date
Companies outside the instalment-payment rules normally pay Corporation Tax nine months and one day after the accounting period ends. The Company Tax Return is normally due 12 months after that period ends. Waiting until the CT600 filing deadline to calculate the bill can therefore leave you late paying.
Check HMRC’s payment guidance and Company Tax Return deadlines. Larger companies may pay earlier in instalments; associated companies, short periods and exceptions can affect the rules. Review HMRC’s instalment guidance if relevant.
2. Build a tax estimate from current records
Keep bookkeeping reconciled and ask for an estimate before the year-end work becomes urgent. Taxable profit can differ from the profit in your accounts, so a percentage of your bank balance is not a reliable calculation.
Our Corporation Tax service can help review the calculation and CT600 requirements. If annual accounts also need preparing, agree the scope alongside our company accounts support.
3. Put the bill into a rolling cash-flow forecast
- Start with the cash available today and forecast customer receipts using realistic payment dates.
- Add wages, suppliers, rent, loan repayments and other tax payments as separate outgoings.
- Include the estimated Corporation Tax payment in the week it must reach HMRC.
- Review the forecast regularly and update the tax provision when profits or assumptions change.
A separate savings pot can make the provision easier to track, but it does not change the tax due. Test a slower-payment scenario too: what happens if your largest customer pays a month late?
4. Check the payment details early
Use the correct Corporation Tax payment reference for the accounting period and allow time for your chosen method to clear. HMRC’s guidance explains the different processing times and weekend or bank-holiday rules. Filing the return does not itself pay the bill. If the forecast shows a shortfall, address it early rather than waiting until the due date.
For help turning your records into a clearer tax and cash-flow plan, book an introductory call with Griffith Accountants.
Reviewed and updated: 26 October 2026. Checked against the HMRC guidance linked above. Your company’s circumstances determine its obligations.
