Reply to: Corporation tax Direct Debit payment

[dingdong]

Why not put the money in a savings account with a standing order to transfer it back?

Then you can put money away to pay the corporation tax bill in a decent savings account with Aldermore say.
The money is then transferred back automatically to your bank account in time for the corporation tax direct debit bill to come out.

If you've got enough cash sitting in the business you can use a fixed term notice account for this and get an even higher rate of interest from Aldermore.

[SueEllen]

LOL I couldnt get a straight answer off my accountant either... I think what is being asked (as I have the same question) whats the latest DD date that can be instructed? So it can meet the deadline?

I would have thought the day before, but I could be wrong...

It's HMRC not a normal company.....

[AJ1982]

LOL I couldnt get a straight answer off my accountant either... I think what is being asked (as I have the same question) whats the latest DD date that can be instructed? So it can meet the deadline?

I would have thought the day before, but I could be wrong...

[TheCyclingProgrammer]

Haha, interesting timing of bumping this as I just found myself trying to remember what I did last year, just like last year!

To the poster above, payment date doesn't matter as long as HMRC get paid by the deadline.

[Lumiere]

I thought the whole point of DD was that you didn't have to calculate the exact date and worry about paying late or dealing with HMRC cheques for £0.73 of prepayment interest.

If my due date is 31 August, which is a Monday, what day should I set the DD for ?

[TheCyclingProgrammer]

What's the point of setting up a DD payment for a one off each time? Why not just pay it?

DD appears to be the preferred method and all it really involves is logging in and submitting a new instruction with the correct reference. They will collect what they are owed on the date specified.

It doesn't need a whole new DD agreement IIRC.

Being able to do this in advance, as soon as you've submitted your CT600, also reduces the chances of forgetting.

[VectraMan]

What's the point of setting up a DD payment for a one off each time? Why not just pay it?

[DirtyDog]

The CT references change each year, with each one being year specific, so you need to make a separate payment each time.

As fas as I'm aware you're fine to set up the DD early. It's fine to pay early too, and HMRC pay interest if you do.

If you get the reference wrong, they tend to spot it and allocate it to the right year - I have a tendency to forget to change my reference each year and it still gets to the right account!

[TheCyclingProgrammer]

minus tax......

Indeed.

[Clare@InTouch]

So just how early can you pay CT?

There's no set date as far as I'm aware, especially if the CT return has been filed.

If you've not filed the return yet and are paying in advance then there's the possibility that HMRC will return the money, as they don't like being a bank!

[Murder1]

So just how early can you pay CT?

As soon as your accountant has completed your books, no?

[The Spartan]

So just how early can you pay CT?

[northernladuk]

Thanks Clare. Do you know what interest they pay? I bet its better than the 0.05% HSBC offer on my "Business Money Manager" account and I have the cash-flow to pay now, so maybe worthwhile (CT bill is about £20k).

EDIT: found my own answer, it's 0.5%. So worth a whopping £100!

minus tax......

[Clare@InTouch]

Thanks Clare. Do you know what interest they pay? I bet its better than the 0.05% HSBC offer on my "Business Money Manager" account and I have the cash-flow to pay now, so maybe worthwhile (CT bill is about £20k).

EDIT: found my own answer, it's 0.5%. So worth a whopping £100!

It's not great, but better than many banks these days. Plus you then know it's done. Save accidentally leaving it until the last minute and then forgetting to pay entirely.

[TheCyclingProgrammer]

As fas as I'm aware you're fine to set up the DD early. It's fine to pay early too, and HMRC pay interest if you do.

Thanks Clare. Do you know what interest they pay? I bet its better than the 0.05% HSBC offer on my "Business Money Manager" account and I have the cash-flow to pay now, so maybe worthwhile (CT bill is about £20k).

EDIT: found my own answer, it's 0.5%. So worth a whopping £100!