Late payment of Corporation Tax?

[mjb1]

My CT bill is due in a couple of days, and whilst I could pay it off in time, I have just taken a huge order and I can see a cash flow headache appearing next month. The order is worth an increase of 50% over my typical annual T/O, and the job is a simple upgrade to an existing customer, should be straight forward and done in a couple of weeks. But I need to buy all the kit for said job, which is a major outlay. I have credit accounts with my suppliers (30 days or 30 days net terms), but the customer is a big national firm and their payment terms are 60 days net, so I need to cover the cost of the purchases somehow.

Am I right in thinking that there is no actual penalty for paying CT late, just interest added on at 2.75%? A couple of months breathing space on paying the CT bill would be a decent help, certainly cheaper interest rate than an overdraft (which my bank wouldn't even do last time I was in this position).

If I go this route, should I inform HMRC of the situation before the CT deadline, or just wait until they chase me (or I'm in a better position to pay it back)?

[Eric Mc]

It is correct that they will charge you interest but they will also pass the debt over to the debt collection arm who can get quite nasty. If you can pay within a week or two of the deadline - then do so. I wouldn't really wait much longer than that.

Contacting them in advance telling them that the payment will be slightly wait would not be a bad idea also.

[LordHaveMurci]

I know somebody who has paid his late as the interest charged was lower than his overdraft charges.

Not sure hiw long he has stretched it out for though. I' e only been a week or so late when I've forgotten & never had any penalties at all.

[davidd]

We have paid our CT late for the last 3 years, mainly due to cashflow. They are normally fine as long as you call them and explain whats going on, give them a payment plan (over a couple of months). They interest is low.

After doing it for a couple of years they have told us we won't be allowed to do it again for a while..

D