Corporation Tax is usually due 9 months and 1 day after your accounting period ends, so the bill often lands while your customers still owe you money. Invoice finance can bridge that gap by releasing most of the value of your unpaid B2B invoices early, often around 80% to 90%, so you can pay HMRC on time. It costs money and does not replace profitable trading, so it helps most when the cash is genuinely owed to you. This is general information, not financial advice, so talk to your accountant before committing.
When is Corporation Tax due?
Under GOV.UK rules, most companies outside the instalment payment regime pay Corporation Tax 9 months and 1 day after the accounting period ends. Companies with annual taxable profits above £1.5 million usually pay in instalments, although the threshold can be adjusted where there are associated companies and some exceptions apply. The payment date is separate from the 12-month deadline for filing the Company Tax Return, so many companies pay before they file.
| Accounting period ends | Corporation Tax due |
|---|---|
| 31 January 2026 | 1 November 2026, which falls on a Sunday |
| 31 March 2026 | 1 January 2027, which is a bank holiday |
If the deadline falls on a weekend or bank holiday, GOV.UK says your payment must reach HMRC on the last working day before it, unless you pay by Faster Payments using online or telephone banking. For the 1 November 2026 deadline, that means aiming for Friday 30 October if you are not relying on Faster Payments.
What does paying late cost?
HMRC’s late payment interest on Corporation Tax is base rate plus 4 percentage points, which has been 7.75% since 9 January 2026. Check the current figure on HMRC’s interest rates page, because it follows the Bank of England base rate.
On paper, paying 60 days late on a £30,000 bill costs about £382 in interest at 7.75%. That is lower than most invoice finance charges, so finance is not always the cheapest way to buy time. Its case is different. It lets you pay on the due date, avoid the enforcement risk that comes with HMRC arrears, and fund the gap from money your customers already owe you. If you cannot pay, contact HMRC before the deadline about Time to Pay. Our guide to how HMRC enforcement affects creditors explains why leaving it late is risky.
How invoice finance works
You sell or borrow against your unpaid B2B invoices. The provider advances most of the value, then releases the balance, minus fees, when your customer pays. There are three common types.
| Type | Who collects | Typical use |
|---|---|---|
| Invoice factoring | The provider chases your customers | Firms that want credit control included |
| Invoice discounting | You keep control, often confidentially | Firms with an established credit control team |
| Selective finance | You fund chosen invoices only | A one-off need, such as a tax payment |
Typical UK advances are often around 80% to 90%, with lower rates in sectors such as construction, where retentions, disputes and payment chains can make invoices harder to fund. Costs usually combine a service fee, often around 0.5% to 3% of turnover or invoice value, and a discount charge on the money you draw, commonly priced as a margin above base rate. Selective or single-invoice deals can cost more per invoice because the provider is funding a one-off risk.
An illustrative example, using assumed terms: on a £40,000 invoice with an 85% advance of £34,000, a 6.25% annual discount rate for 45 days costs about £262, and a 1% service fee adds £400. The total is roughly £662, or about 1.7% of the invoice. Always check set-up fees, minimum charges, audit fees, notice periods and exit terms before signing.
Is invoice finance right for your tax bill?
It tends to suit businesses that sell on credit to other businesses and have invoices of reasonable size outstanding. It suits them less if invoices are disputed, customers are concentrated in one or two accounts, or most of your debtors are already well overdue. Providers generally look hard at your customers’ credit quality, which is why your own credit control matters. Our guides to aged debtors reporting and credit control KPIs show how to present a clean ledger.
Ask whether the facility is recourse, meaning you remain liable if a customer does not pay. That matters, because finance does not remove the risk of a customer failing, a point our guide to financial distress rising across UK businesses makes.
Collect first, finance second
Money already owed to you is the cheapest cash you can get. Before taking on finance, look at what is overdue.
- Chase invoices past terms and claim statutory interest where it applies.
- Escalate stalled accounts using our guide on when to escalate an invoice.
- Hand routine chasing to outsourced credit control so cash arrives before the deadline.
- Run credit checking on customers whose invoices you plan to finance.
- Tighten processes using our guide to using technology to prevent late payment.
Recovering an old invoice often costs less than financing a new one, and our no win, no fee model means you pay only when we collect. If a customer cannot or will not pay, VAT bad debt relief may recover the VAT once the debt is more than six months overdue, subject to the rules. Our broader guide to B2B debt collection tips sets out the order of play.
A simple plan before your deadline
- Work out your Corporation Tax due date and likely bill with your accountant.
- List invoices due to be paid before that date and those likely to run late.
- Chase and escalate overdue accounts now.
- Compare invoice finance quotes on total cost, not just the headline rate.
- Ask about Time to Pay before the deadline if a gap remains.
Construction firms face the toughest squeeze, because retentions and long payment chains tie up cash. Our construction debt collection team handles those accounts, and our international debt collection service helps when overseas customers hold up payment. Reform may ease this in time, as our piece on the Commercial Payments Bill and SME cash flow explains, though not before your deadline. Our look at UK SME profits and late payments shows why profit on paper does not always mean cash in the bank.
Frequently asked questions
When is Corporation Tax due?
Usually 9 months and 1 day after your accounting period ends, for companies that are not required to pay by instalments. Larger companies usually pay earlier by instalments.
Can invoice finance pay my Corporation Tax bill?
Yes, in practice. The advance is working capital for your business to use, so many businesses use it for tax, wages, suppliers or other short-term needs. It still has a cost and a contract, so compare terms carefully first.
What happens if I miss the deadline?
HMRC charges late payment interest from the day after the deadline, currently 7.75%. Late filing penalties are separate and apply to missing the Company Tax Return deadline. Contact HMRC early if you cannot pay.
Is invoice finance the same as a loan?
Not exactly. It is finance secured against, or linked to, your invoices. Terms vary, including whether the facility is recourse and whether you carry the risk if your customer does not pay. Read the agreement carefully before signing.
Get paid before the deadline
If overdue invoices are stopping you from paying HMRC on time, the quickest route is often collecting what you are owed. Speak to our team for a free, no-obligation conversation about recovering overdue invoices, or to discuss your options before the deadline passes.
