What are the options for paying corporation tax?

For many business owners, corporation tax is often one of the biggest annual expenses – and managing such a significant payment alongside day-to-day operations can prove to be a real challenge.

If you’re looking for more flexibility with your corporation tax payment, there are several funding options that could help. Here, we look at everything you need to know about paying corporation tax, including how FlexiPay from Funding Circle can help. 

What is corporation tax?

Corporation tax is a tax on company profits that all UK limited companies are required to pay HMRC. The current rate is 25% for businesses with profits over £250,000, while those with profits between £50,000 and £250,000 pay a tapered rate starting at 19%. Companies with profits under £50,000 pay the lower 19% rate.

Your corporation tax bill is due nine months and one day after your company’s financial year ends. So if your financial year ends on March 31st, you’ll need to pay your corporation tax by January 1st of the following year. 

Managing your corporation tax payment

While corporation tax is a predictable annual expense, managing payments can easily eat into your business’s cash flow. This is especially true if you need to invest in growing the business, such as buying stock or equipment around the same time the corporation tax is due. 

Good tax planning throughout the year can help you prepare, including setting aside funds every month and forecasting your likely tax bill based on projected profits.

Even with planning, however, there may be times when you need more flexibility in how you manage your corporation tax payment. Many businesses look for solutions that allow them to preserve working capital while meeting their tax obligations on time. Having a clear idea of what options are available and choosing the approach that best suits your business needs is a big help. 

Can I pay corporation tax in instalments? 

Paying corporation tax in instalments isn’t always straightforward. While larger companies (those with profits over £1.5 million) are required to pay quarterly, most UK businesses need to pay their corporation tax as one lump sum, nine months and one day after their accounting period ends.

Although HMRC may offer Time to Pay arrangements for businesses experiencing temporary difficulties, some companies may prefer to explore other options, like a corporation tax loan, that offer more control over payments. This allows them to manage their tax obligations in a proactive way while maintaining healthy cash flow.

For businesses looking for flexibility in paying corporation tax in instalments, alternative funding solutions can often provide more certainty and control than traditional payment arrangements. These options let you choose payment terms that align with your business needs, rather than having to negotiate with HMRC.

Can I get a corporation tax loan? 

You can get a corporation tax loan, and many businesses choose to access funding to help manage their tax payments more effectively. While traditional loans are one option, there are more flexible ways to handle your corporation tax bill. FlexiPay from Funding Circle is a flexible line of credit that puts you in control of how and when you pay your tax, amongst other expenses. 

Pay your corporation tax with FlexiPay

FlexiPay from Funding Circle gives you a more flexible way to manage your corporation tax payment, helping you maintain healthy cash flow while staying on top of your tax obligations. Make your payment directly to HMRC from your FlexiPay account, then spread the cost into manageable instalments to suit your business needs. 

• Transfer your corporation tax payment directly to HMRC through your online account
• Choose to repay over 1, 3, 6, 9 or 12 months
• Pay one simple flat fee instead of ongoing interest charges
• Credit limits up to £250,000
• No annual fees or hidden costs
• Track everything easily through our portal or app

Using FlexiPay for your corporation tax means you can maintain healthy cash flow while meeting your payment deadline. The process is straightforward: simply log in to your online account or app, transfer the full amount directly to HMRC, then spread your FlexiPay repayments over your chosen term. 

Whether you’re planning investments, managing seasonal fluctuations, or looking to grow your business, you decide how to balance your cash flow.

Staying on top of corporation tax

Paying your corporation tax on time while keeping cash flow healthy is a challenge for many businesses. With FlexiPay, you can manage it in a way that works for you and keep focusing on building your business. 

26/02/25: While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.