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Corporation Tax interest rules

Corporation Tax late-payment interest is daily and separate from return-filing penalties. Learn the /366 clerical estimate, effective payment dates, changing rates and part-payment intervals.

Ordinary Corporation Tax interest: establish the facts first

Late-payment interest compensates for unpaid Corporation Tax after its normal payment due date. TMA 1970 section 87A is the statutory basis (COM80013); HMRC EM4001 explains daily interest at the prescribed rate. This guide and its calculator concern ordinary late-payment interest, not instalment debit/credit or repayment interest.

COM80010 excludes the normal due date. The ordinary interval runs from the following day through the effective payment date. Due 1 October and paid 30 November: 60 chargeable days. DMB's due-inclusive/payment-exclusive description also gives 60 days for constant facts; it is not authority to move rate-change days.

The paired calculator estimates one unchanged tax balance, one manually entered annual rate and one continuous interval. It does not know HMRC's rate history, payment allocations or account adjustments and cannot determine the exact HMRC account balance.

Rule summary

Daily interest, dates and changing facts

HMRC COM80010 makes the normal CT due date non-interest-bearing: the ordinary period starts the next day and runs through effective payment. Payment on the due date gives zero days; one day later gives one. Calendar days are counted in UTC; leap day counts as a day.

DMBM404010 publishes amount × annual rate × days / 366 for clerical calculation. It describes due date included/payment date excluded; for a constant rate and balance this has the same elapsed day count as the CT endpoint description. Do not use that equivalence to allocate changing-rate days: use the actual rate on its change date.

For a split interval, enter the day before its first chargeable day as the start boundary and the last chargeable day as the end. A new rate beginning 1 November therefore starts a new interval with boundary 31 October. Neither gaps nor overlapping chargeable days should be introduced.

Rates change: check the official HMRC schedule for each interval, not just today's rate. Part-payments change principal: verify HMRC's effective dates and allocations, then split balance intervals. The tool neither retrieves rates nor models a payment ledger.

Interest is not a late-filing penalty and is not compounded here. The payment due date is separate from the CT600 return-filing deadline. Quarterly-instalment debit/credit interest and repayment interest are different regimes outside this estimate.

Worked examples

How the rule behaves in practice

  • One balance, one fixed rate: Illustrative fixed annual rate 8%, tax £10,000, due 1 October 2026, effective payment 30 November 2026. Assume no intervening rate or balance change. 2 October through 30 November inclusive gives 60 days. £10,000 × 0.08 × 60 / 366 = £131.147540…; final interval estimate £131.15. The rate is illustrative, not a claim about HMRC's actual rate on these dates.
  • Zero versus one chargeable day: £10,000 at an illustrative fixed 8%, due 1 October 2026. Compare payment on 1 October with payment on 2 October. Payment on the due date: 0 days, £0.00. Payment one day later: 1 day, £10,000 × 0.08 / 366 = £2.185792… → £2.19. The due date is not a chargeable late day.
  • Split at a rate change: Illustrative rates only: £10,000 due 1 October, paid 30 November 2026; 8% until 31 October and 9% from 1 November. The new rate applies on the change date. Split mode: boundary 1 October/end 31 October gives 30 days at 8% = £65.57. Boundary 31 October/end 30 November gives 30 days at 9% = £73.77. Sum of rounded interval estimates: £139.34. Do not apply one current rate to all 60 days; an unrounded aggregate can differ by pennies.
  • Split at a part-payment: Illustrative fixed 8%: £10,000 due 1 October, £4,000 paid effectively on 31 October, remaining £6,000 paid on 30 November 2026. Assume HMRC's allocation charges the initial balance through that effective payment day. Verify the payment allocation first. Boundary 1 October/end 31 October: £10,000 for 30 days = £65.57. Boundary 31 October/end 30 November: £6,000 for 30 days = £39.34. Rounded interval sum £104.91. A single £10,000 balance for 60 days would overstate this example; this tool does not simulate the account.

Practical consequences

  • Changing rates require interval calculations: the new rate applies on its change date. Check the official schedule for dates and rates; do not apply today's rate retrospectively to the entire overdue period.
  • Part-payments require balance intervals using verified effective payment dates and allocations. Tax stood over or suspended, carry-back adjustments, insolvency and multiple liabilities need HMRC computation/professional review rather than this estimate.
  • Corporation Tax payment, CT600 return filing and Companies House accounts filing are separate obligations. Late filing may attract CT600 penalties, but interest is not a penalty. Interest is not charged on CT penalties or interest itself in this ordinary model.
  • The final interval is rounded once to the nearest penny, half-up, with exact pence/rate arithmetic and no daily rounding. Summing separately rounded interval estimates may differ by pennies from HMRC's aggregate calculation.
  • Interest enquiries/objections are not ordinary penalty appeals. Establish the underlying tax, dates, rates and payment allocation, then ask HMRC to explain or correct the computation; the Interest Review Unit handles qualifying objections.

Important limits

  • This calculator is not an HMRC account simulator. Rate changes and part-payments require separate intervals; multiple liabilities, repayment interest, suspended tax, carry-backs, insolvency and specialist adjustments need review.
  • The rate is manual, not a default or automatic historical lookup. HMRC's effective payment date can differ from receipt; its account calculation and rounding remain authoritative.

Primary sources and review date

Reviewed on . Preserved source review from the accepted scoped statutory repair; this contract migration does not re-date that review.

Applies to: Ordinary CT late-payment interest; HMRC clerical /366 basis. User must supply the applicable historical annual rate.

Reviewed scope: One fixed principal, one annual rate and one verified interval; no rate history, part-payment ledger, instalment regime or exact HMRC account balance.

Review basis and change triggers

Reviewed model: corporation-tax-interest-calculator: Ordinary CT late-payment interest; TMA 1970 s87A; fixed-rate clerical /366 estimate; sources reviewed 28 September 2026

  • A cited source or statutory regime changes.
  • Reviewed content, runtime adapter or domain implementation changes.
  • A new effective period falls outside the supported scope.

Turn the result into an action plan

  • Verify the normal Corporation Tax payment due date, not the CT600 filing deadline, and obtain HMRC's effective payment dates.
  • Choose complete-period mode only if the rate and principal stay constant. Otherwise use split mode with the day before the first chargeable day and the last chargeable day for each interval.
  • Compare the transparent estimate and interval breakdown with HMRC's actual computation before advising on the account amount payable.

Use the tool

Corporation Tax Interest Calculator

Estimate ordinary Corporation Tax interest for one fixed balance, one manually entered annual rate and one verified interval. Changing rates, part-payments and HMRC account adjustments need separate treatment.

FAQ

Does the calculator use the current HMRC rate automatically?

No. You must enter the rate applicable to the whole interval. If rates change, use split intervals and the official rate schedule.

Is this the exact interest on my HMRC account?

No. It is a transparent fixed-balance, fixed-rate interval estimate. Payment allocations, account adjustments, different regimes and HMRC rounding are not simulated.

Why is the denominator 366, even outside a leap year?

The estimate follows DMBM404010's published clerical /366 formula, not a calendar-year denominator selected by JavaScript. HMRC's illustrative CT207 LP row (£75,000, 6.8%, 1,187 days, £16,540.16) corroborates that arithmetic basis. Its printed dates are inconsistent, so it is not used as a date-count example or actual historical rate evidence.