Where Do Companies Pay Taxes
in the UK?

Where do companies pay taxes in the UK? This is a crucial question for any business operating in the country. In fact, knowing where and how to pay business taxes is essential for staying compliant and avoiding penalties. 

The UK tax system is centralised and overseen by HM Revenue & Customs (HMRC), the government body responsible for collecting business taxes. Below, you’ll find a detailed explanation of where the main business taxes are paid and how to complete each process correctly.

Corporation Tax

The main tax businesses pay in the UK is Corporation Tax, which is charged on company profits—both in the UK and abroad—if the business is based in the UK. Companies file and pay this tax directly to HMRC through their online system.

To meet this requirement, a company must:

• Register for Corporation Tax with HMRC within three months of starting business activity.
• Submit an annual return (form CT600) online.
• Pay the tax within nine months and one day of the end of its accounting period.

You can pay using a bank transfer, direct debit, debit/credit card, or your company’s online banking system. HMRC provides reference numbers and payment details after registration.

Value Added Tax (VAT)

If your business’s annual turnover exceeds £90,000, you must register for VAT (Value Added Tax). You can complete this process through HMRC using the Making Tax Digital (MTD) platform.

Generally, you must file VAT returns every quarter and make payments online by the deadlines HMRC sets. In essence, the VAT you pay to HMRC corresponds to the amount you charge your customers. At the same time, you can reclaim the VAT paid on eligible business purchases.

Payroll Taxes (PAYE)

If your business has employees, you’ll need to register for PAYE (Pay As You Earn). This system allows you to deduct income tax and National Insurance contributions from your employees’ wages and pay them to HMRC.

You must submit PAYE payments and reports monthly through HMRC’s online portal, which also helps you manage payroll and other employer obligations.

Business Rates (Local Taxes)

Besides national taxes, businesses using commercial premises pay Business Rates, a local tax collected by the local council. Payments go directly to the relevant council, based on the property’s rateable value.

How to Pay Business Taxes

You can pay most business taxes—Corporation Tax, VAT, and PAYE—directly to HMRC, preferably online for security and convenience. Common payment methods include:

• Direct bank transfer
• Debit or corporate credit card
• Direct debit
• Electronic payments via BACS (standard transfer, takes 3 working days) or CHAPS (same-day transfer)

Make sure to use the correct payment reference for each period, as it changes yearly. Depending on your chosen method, payments can arrive the same day or take a few days.

Deadlines and Penalties

Tax returns and payments must be submitted within the deadlines set by HMRC. Otherwise, late payments can lead to hefty penalties, with interest starting to build up immediately after the deadline. Moreover, the longer you delay, the more likely it is that additional charges will apply.

Although HMRC may show some flexibility in genuine cases, it’s important to act early. If you think you might miss a deadline, it’s best to contact HMRC as soon as possible to discuss your options and avoid serious consequences.

Tax Advice and Support

Due to the complexity of the tax system, many businesses choose to hire a tax advisor. These professionals help optimise tax management and reduce the risk of errors.

Additionally, HMRC provides free resources such as webinars, interactive guides and a helpline. However, for more complex cases, independent professional advice remains the safest choice.

In Summary

In the UK, companies pay their taxes directly to HMRC. The process is digital, safe, and straightforward, letting you manage your tax duties from anywhere. Register your company properly, file your returns on time, and use the right payment methods to keep your business compliant and penalty-free.