How is Corporation Tax paid?

In practice, in the UK

Payment and filing are separate obligations that do not share a timeline: the tax itself falls due before most companies have to file their CT600, which surprises directors used to thinking of the return as the trigger for payment. Most companies pay as a single amount once their profit for the period is known, while companies whose profits sit above a certain size pay in instalments spread across the accounting period, based on an estimate of profit that then needs adjusting once the actual figure is known. Getting the instalment regime wrong in either direction creates a mismatch: paying too little brings interest, paying too much ties up cash the business could otherwise use.

In Odoo

Odoo can flag the outstanding Corporation Tax liability on the balance sheet once an estimate is posted as a provision, which helps treasury planning even though Odoo takes no part in calculating the liability itself. A company on the instalment regime benefits from tracking each instalment against the running estimate inside the accounting system, rather than treating Corporation Tax as a single unplanned cash event once a year.

Common mistakes

• Assuming payment falls due at the same time as filing the CT600, rather than before it.
• Failing to provide for Corporation Tax in management accounts until the year-end computation is finished.
• Missing the instalment regime entirely for a company that has grown into it.