Can I pay corporation tax in instalments?

Jemma01

Hi

[15/08/2025] My question: I owe HMRC a lot of money and want to budget the payment before it is due next year. The amount is large enough that I don't want to keep it in my account in case I need it for an emergency. Can I do that? Anyone with experience?

[18/08/2025] Answer: There are two options for someone like me who wants the money out of sight out of mind:
1) You'll need to call the debt folks on 03002003840, they can set up an advance payment on the Time to Pay service, which will create a direct debit from the account you want to pay from. You can't do this online atm. If you're viewing this a year later, check the Budget Payment Plan service designed specifically for advanced payments. Best to do this after filing, so you know exactly how much you owe.
2) from this user

Isthisforreal99 said:

To the best of my knowledge there is actually nothing to stop you making ad-hoc payments before a liability is due. It will just sit as a credit on your CT account.

You can build credit by logging into your business account online and choosing "Make a corporation payment.", and then once you file, it will just recalculate the credit remaining (if any) or the remaining balance. I prefer this option as it gives me control over how much I send and I don't have to wait for the direct debit. Thank you to Isthisforreal99 for that.

*) Of course, you can have a separate savings account and benefit from the interest it would generate. 

I think one comment below said that it is not HMRC's job to help people pay their taxes, that's not accurate, yes HMRC won't pay on your behalf (!), but millions of taxpayers' money is going towards the Time to Pay service & Budget payment plan to support people make the payments. Don't hesitate to reach out for help.

Also, don't bother calling HMRC's general helpdesk, they told me I couldn't make scheduled payments, just ring the number I put above.

Thanks

MyRealNameToo

Large companies have to pay in quarterly instalments (over £1.5m profit) and very large companies (over £20m profit) also have to pay by quarterly instalments but the first payment is due earlier. 

For SMEs its supposed to be a single payment


On the one hand its good that you have admitted you have a problem and dont trust yourself to just accrue it in an account and pay it over when its due but on the flip side its slightly worrying too. 

Do you have an accountant? Have you asked them what would happen if you paid it in chunks as long as it's all paid in full by the time it's due? 

I've never tried, I accrue each month when doing the accounts and stick it in a business saver which I access once a year to pay the corporation tax from. It's not my money as far as I'm concerned so there is no temptation to spend it and it naturally earns me interest rather than HMRC whilst it sits there. 

Jemma01

MyRealNameToo said:

Large companies have to pay in quarterly instalments (over £1.5m profit) and very large companies (over £20m profit) also have to pay by quarterly instalments but the first payment is due earlier. 

For SMEs its supposed to be a single payment


On the one hand its good that you have admitted you have a problem and dont trust yourself to just accrue it in an account and pay it over when its due but on the flip side its slightly worrying too. 

Do you have an accountant? Have you asked them what would happen if you paid it in chunks as long as it's all paid in full by the time it's due? 

I've never tried, I accrue each month when doing the accounts and stick it in a business saver which I access once a year to pay the corporation tax from. It's not my money as far as I'm concerned so there is no temptation to spend it and it naturally earns me interest rather than HMRC whilst it sits there. 

My accountants don't really question what I do, because I've been paying all my taxes on time. I've had a change of circumstance this year (my source of income changed), + I bought my house with a mortgage last year that I'm aggressively trying to pay off, so I need to make sure that my taxes come first. I will be earning approximately 50K post taxes from now until January, I just don't want to keep 19K in my account, I want it out of sight and paid off as soon as I'm paid. I don't want to owe anyone anything.

MyRealNameToo

Jemma01 said:

MyRealNameToo said:

Large companies have to pay in quarterly instalments (over £1.5m profit) and very large companies (over £20m profit) also have to pay by quarterly instalments but the first payment is due earlier. 

For SMEs its supposed to be a single payment


On the one hand its good that you have admitted you have a problem and dont trust yourself to just accrue it in an account and pay it over when its due but on the flip side its slightly worrying too. 

Do you have an accountant? Have you asked them what would happen if you paid it in chunks as long as it's all paid in full by the time it's due? 

I've never tried, I accrue each month when doing the accounts and stick it in a business saver which I access once a year to pay the corporation tax from. It's not my money as far as I'm concerned so there is no temptation to spend it and it naturally earns me interest rather than HMRC whilst it sits there. 

My accountants don't really question what I do, because I've been paying all my taxes on time. I've had a change of circumstance this year (my source of income changed), + I bought my house with a mortgage last year that I'm aggressively trying to pay off, so I need to make sure that my taxes come first. I will be earning approximately 50K post taxes from now until January, I just don't want to keep 19K in my account, I want it out of sight and paid off as soon as I'm paid. I don't want to owe anyone anything.

Just because your accountants dont question you doesnt mean they can't or wouldnt answer questions from you. 

Ours asked us a question for the first time in years a few months ago asking confirmation what two sets of payments marked as insurance were for. I replied on was PI/EL/PL and the other relevant life and didnt hear anything back (which is normal for them) but they are always quick to respond when I ask a question or admit I've messed up and paid my VAT to PAYE or something as they are much better and quicker at dealing with HMRC than I am. 

eskbanker

Jemma01 said:

I reached out to HMRC and they were rather unhelpful, I'll put the useless chat conversation at the end if anyone is bored enough. 

[...]

Emma said: Thank you. How can I help?
You said: I want to set up a time to pay for corporation tax, I'm worried about the large amount, so I want to pay in instalments. I haven't filed yet, but my accountant told me it is a few pounds less than 19K

To be honest I can see why there was confusion - the Time To Pay facility they offer is specifically a payment plan option for overdue payments, i.e. arrears/debts, so by using that phrase to explain what you wanted, it's perhaps unsurprising that she didn't twig that you were wanting to pay in advance!

https://www.gov.uk/guidance/find-out-how-to-pay-a-debt-to-hmrc-with-a-time-to-pay-arrangement

As above, putting the money aside into a standalone savings account until needed seems the obvious solution, which also has the benefit of earning interest for you rather than for HMRC....

Slinky

Going back a good number of years, I think I prepaid Corp Tax and was then given a bit of interest on it by HMRC. 

I've just googled and found this.

https://www.gov.uk/get-refund-interest-corporation-tax

Jemma01

eskbanker said:

Jemma01 said:

I reached out to HMRC and they were rather unhelpful, I'll put the useless chat conversation at the end if anyone is bored enough. 

[...]

Emma said: Thank you. How can I help?
You said: I want to set up a time to pay for corporation tax, I'm worried about the large amount, so I want to pay in instalments. I haven't filed yet, but my accountant told me it is a few pounds less than 19K

To be honest I can see why there was confusion - the Time To Pay facility they offer is specifically a payment plan option for overdue payments, i.e. arrears/debts, so by using that phrase to explain what you wanted, it's perhaps unsurprising that she didn't twig that you were wanting to pay in advance!

https://www.gov.uk/guidance/find-out-how-to-pay-a-debt-to-hmrc-with-a-time-to-pay-arrangement

As above, putting the money aside into a standalone savings account until needed seems the obvious solution, which also has the benefit of earning interest for you rather than for HMRC....

I appreciate what you're saying, it is actually not just for that, the budget payment plan was born out of the time to pay service, and at some point ttp was used for budgeting as well. And because the bpp still doesn't support corporation tax (at least there wasn't a plan that I was aware of), there's still a possibility ttp is still used the old way for services that bpp doesn't yet support.

I'm going to ring someone that I think still works on it. I find it hard to believe that there isn't a way to pay in instalments.

Jemma01

Slinky said:

Going back a good number of years, I think I prepaid Corp Tax and was then given a bit of interest on it by HMRC. 

I've just googled and found this.

https://www.gov.uk/get-refund-interest-corporation-tax

They do, I usually pay early and they give credit to the account if you opt for that, or they send a cheque.

eskbanker

Jemma01 said:

eskbanker said:

Jemma01 said:

I reached out to HMRC and they were rather unhelpful, I'll put the useless chat conversation at the end if anyone is bored enough. 

[...]

Emma said: Thank you. How can I help?
You said: I want to set up a time to pay for corporation tax, I'm worried about the large amount, so I want to pay in instalments. I haven't filed yet, but my accountant told me it is a few pounds less than 19K

To be honest I can see why there was confusion - the Time To Pay facility they offer is specifically a payment plan option for overdue payments, i.e. arrears/debts, so by using that phrase to explain what you wanted, it's perhaps unsurprising that she didn't twig that you were wanting to pay in advance!

https://www.gov.uk/guidance/find-out-how-to-pay-a-debt-to-hmrc-with-a-time-to-pay-arrangement

As above, putting the money aside into a standalone savings account until needed seems the obvious solution, which also has the benefit of earning interest for you rather than for HMRC....

I appreciate what you're saying, it is actually not just for that, the budget payment plan was born out of the time to pay service, and at some point ttp was used for budgeting as well. And because the bpp still doesn't support corporation tax (at least there wasn't a plan that I was aware of), there's still a possibility ttp is still used the old way for services that bpp doesn't yet support.

I'm going to ring someone that I think still works on it. I find it hard to believe that there isn't a way to pay in instalments.

Fair enough - in your shoes I'd make more of an effort to explain in plain language that you want to make multiple payments in advance rather than in arrears, rather than asking more vaguely for 'help budgeting'.  I don't suppose you'd be the first to ask but would imagine that the vast majority of people contacting them about payment plans will be doing so out of a desire to push payments back rather than bringing them forward, so important to spell it out IMHO....

Isthisforreal99

To the best of my knowledge there is actually nothing to stop you making ad-hoc payments before a liability is due. It will just sit as a credit on your CT account.

Altior

I believe you're not supposed to include the names of regular support agents when quoting support chats.

For what it's worth, and that might not be a great deal, in my view you are pretty rude in the chat.

The way you framed the query is also pretty poor in my view and seems almost designed to wrongfoot the agent. You stated you owe £19K and don't have the money (not a future liability), the natural assumption from that and I would also take from that phrasing is that you're struggling to pay your tax bills.

Your query is a personal/business money management/budgeting issue and not a HMRC issue. Managing funds is part of the basics of operating a business, and I also believe the first port of call for you should be your adviser. Regularly putting money aside for your CT liability is straight forward in accounting terms (accruals/prepayments). This is just wasting HMRC's time I feel.