Tax Tip Tuesday: Corporation Tax instalment payments

Large companies with annual taxable profits between £1.5 million and £20 million must pay their Corporation Tax electronically in instalments. Companies with annual profits of over £20 million are classed as Very Large and must also pay their tax in instalments. Instalments for Very Large companies are due earlier than Large company instalments.

The profit limits above are divided by the total number of associated companies, meaning that instalments may become relevant for companies with profits significantly lower than the above thresholds.

Instalments for Large companies are typically due quarterly, starting six months and 14 days into the accounting period. Estimates of taxable profits may have to be used to calculate payments falling due before accounting profits have been calculated. Interest is charged by HMRC on underpaid instalments while overpaid instalments accrue repayment interest.

Contact our experts Craig Coyle, Paul Donnelly or Duncan McKellar for Corporate Tax advice and support. You can also review the comprehensive suite of Taxation services provided to Scottish SMEs, business owners and individuals by Consilium Chartered Accountants.

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