Corporation tax loans

A corporation tax loan pays your company’s corporation tax to HMRC on the due date, and you repay the lender monthly over the following months. A company with profits up to £1.5 million pays its corporation tax nine months and one day after the end of the accounting period, in one sum. Paying late costs interest at base rate plus 4%, and HMRC can agree a Time to Pay arrangement as an alternative to a loan.

Start a funding searchFind what fits
Two accountants going through figures at a desk

When corporation tax is due

A company with taxable profits up to £1.5 million pays its corporation tax nine months and one day after the end of its accounting period. For a year ending 31 December 2025, that was 1 October 2026. The company tax return is due later, twelve months after the end of the period, so a company can owe the tax before the return is filed.

The profit was made in a year that ended nine months before the bill, and the cash it produced may already have gone into stock, equipment, wages or dividends. The bill arrives in one sum, at the main rate of 25% on profits above £250,000, the small profits rate of 19% on profits of £50,000 or less, and with marginal relief in between.

A corporation tax loan pays the bill on the due date and spreads it over the following months. It is a short unsecured business loan with a set purpose, and some lenders pay the money directly to HMRC.

Corporation tax deadlines and penalties

Payment, profits up to £1.5 million
Nine months and one day after the end of the accounting period, in one payment.
Payment, larger companies
Companies with profits over £1.5 million pay in instalments. For a twelve-month period the first is due six months and 13 days after the period starts, then every three months. For the year to 31 December 2026: 14 July 2026, 14 October 2026, 14 January 2027 and 14 April 2027. Profits over £20 million follow a separate timetable.
Company tax return
Twelve months after the end of the accounting period.
Late filing penalties
£200 if the return is a day late, another £200 at three months, then 10% of any unpaid tax at six months and another 10% at twelve. After three late returns in a row, the £200 penalties become £1,000 each.
Interest on late payment
Charged from the due date until the tax is paid, at the Bank of England base rate plus 4%.

Interest on late corporation tax

HMRC charges interest on corporation tax paid after the due date, at base rate plus 4%. With base rate at 3.75%, the rate has been 7.75% a year since 9 January 2026. It is charged on the tax outstanding for each day it is late, so a part payment reduces it.

The penalties gov.uk sets out for corporation tax are for filing the return late. If the return is more than six months late, HMRC estimates the tax due and adds a penalty of 10% of the unpaid tax, and another 10% at twelve months. File the return on time even when you cannot pay: it avoids those penalties and puts the actual figure on record.

An unpaid tax bill can be pursued by HMRC, and it shows up when a lender, a buyer or an investor looks at the company. Paying late without an arrangement costs interest at base rate plus 4% on the unpaid tax, and HMRC can start recovery action at any point.

7.75%
HMRC late payment interest since 9 January 2026: Bank of England base rate of 3.75% plus 4%.

Spreading a corporation tax bill

Illustrative example

A £90,000 corporation tax bill paid on the due date with a loan repaid in six equal monthly instalments. The loan rate and fee are assumptions for the arithmetic: each lender sets its own.

Monthly repayment at an assumed 11% a year
£15,484.91
Interest over six months
£2,909.46
Arrangement fee at an assumed 1.5%
£1,350.00
For comparison: interest on the same six monthly payments at HMRC’s 7.75%
about £2,045
Loan: total cost
£4,259.46

Spread the same way through an agreed Time to Pay arrangement, the bill would cost about £2,045 in interest, roughly £2,214 less than the loan. HMRC may refuse the plan or ask for more up front, while the lender’s terms are fixed once you sign. The tax bill funding calculator runs these figures on your own bill.

Corporation tax loan or Time to Pay

HMRC can agree a payment plan for a company that cannot pay its tax on time. It asks how the company will pay the bill as soon as it can, checks that the plan is realistic and affordable, and expects the company to reduce the debt as much as possible first, by releasing assets such as stock, vehicles and shares. HMRC’s guidance says it may ask directors to put personal funds into the business, accept lending or extend credit.

If the company could borrow on reasonable terms, HMRC may expect it to. If the company cannot borrow, a Time to Pay arrangement may be the way to spread the bill. See Time to Pay arrangements with HMRC for how to ask.

A loan suits a profitable company whose cash is tied up for a reason it can explain: a large stock purchase, growth, a slow customer. A company that cannot pay because it is losing money needs advice about the business before it borrows for the tax. If the bill is large because of a one-off gain, such as selling property, plan the tax at the time of the sale with your accountant.

A director thinking of lending personal money to the company to pay the bill should read lending your own money to your company first.

What a lender asks for

Lenders look at whether the company is still trading profitably now, as well as in the year the tax relates to. Expect a request for a personal guarantee from directors; read what a personal guarantee means first. The funding search is for limited companies and LLPs, which are the businesses that pay corporation tax.

VAT and tax bill funding calculator

The monthly payment and total cost of funding a VAT or corporation tax bill over a few months.

Open the calculator

Questions people ask

When is corporation tax due?

For a company with taxable profits up to £1.5 million, corporation tax is due nine months and one day after the end of the accounting period. Companies with profits over £1.5 million pay in quarterly instalments, the first six months and 13 days after the period starts. The company tax return is due twelve months after the end of the period.

What happens if I pay corporation tax late?

HMRC charges interest from the due date until the tax is paid, at base rate plus 4%, which has been 7.75% a year since 9 January 2026. If the return is also late, there are late filing penalties of £200, then another £200 at three months, then 10% of unpaid tax at six months and another 10% at twelve. HMRC can also take action to recover the debt.

Can I pay corporation tax in instalments?

You can ask HMRC for a Time to Pay arrangement, which spreads the bill with interest. HMRC checks affordability and may ask directors to put in funds or accept lending. Alternatively a corporation tax loan pays HMRC on the due date and you repay the lender monthly. Companies with profits over £1.5 million already pay in quarterly instalments.

How much does a corporation tax loan cost?

Each lender sets its own rate and fees. Work out the total cost in pounds: interest over the term plus any arrangement fee. Compare it with HMRC interest at 7.75% on the same payment plan if a Time to Pay arrangement would be agreed, and with the cost of waiting until your own cash comes in.

Can a corporation tax loan be paid directly to HMRC?

Some lenders pay the money straight to HMRC against your company’s corporation tax reference, so the funds cannot be used for anything else. Others pay your company and you make the payment yourself. Either way, keep the HMRC payment confirmation, because the lender may ask for it.

Finance is subject to status and to the lender’s terms. A personal guarantee makes you liable for the company’s debt if it does not repay, and it can be enforced against your own assets, including your home. Nothing here is a personal recommendation.

Working capital

VAT loans

A short loan that pays your VAT bill on the due date and spreads the cost over a few months.

Read more →

Can I get a Time to Pay arrangement with HM Revenue and Customs?

Who qualifies, the interest, what is asked for, and how it compares with a loan.

Read more →

R&D tax credit loans

A loan against the R&D tax relief your company expects to receive, repaid when the claim is paid.

Read more →

Working capital finance

How the trading cycle ties up cash, and which short-term finance fits each gap.

Read more →
All business funding

Start a funding search

Start a funding search

Funding searches run on Swoop’s platform. Swoop Finance Limited is a credit broker and not a lender, and is authorised and regulated by the Financial Conduct Authority (FRN 936513). Buzz Accounting Ltd introduces businesses to Swoop and may receive a fee from Swoop when funding is arranged. Business funding is separate from the financial advice Equity & General Financial Services Limited gives through this website. Finance is subject to status, and a lender may ask a director for a personal guarantee.

Cover for a personal guarantee

If a lender asks you to guarantee the company’s borrowing, our advisers can advise on life cover for that debt.

Request a meeting