Calculating QIPs

By Tolley

The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Calculating QIPs
  • Estimating the company’s corporation tax liability
  • Calculating the instalment amount ― large companies
  • Instalment due dates ― large companies
  • Calculating the instalment amount ― very large companies
  • Instalment due dates ― very large companies
  • Interest on instalment payments
  • Penalties

This note provides details on how to calculate quarterly instalment payments QIPs for large and very large companies The instalment amounts are based on the estimated corporation tax liability of the company s current accounting period Therefore thismeans that large and very large companies will be required to forecast their tax liabilities as accurately as possible in order to avoid interest charges on underpayments For accounting periods commencing on or after 1 April 2019 very large companies will need to carry out such forecasts even earlier during the accounting period as their instalment payments must all be paid during the accounting period For general details regarding QIPs and determining whether a company is large or very large for thispurpose please refer to the QIPs when do they apply guidance note Estimating the company s corporation tax liability In order to determine the company s corporation tax liability for the accounting period it is necessary to estimate the tax that is due on the company s total taxable profits including any liability under CTA 2010 s 455 loans to participators For further information on loans that fall within these provisions please refer to the Loans to participators guidance note amounts apportioned from controlled foreign companies CFCs under TIOPA 2010 s 371BC 1 For further information on CFCs please refer to the Controlled foreign companies CFCs guidance note Any reliefs that are available to the company should also be deducted as normal to arrive at the company s estimated total tax liability For general guidance on the calculation of a company s corporation tax liability please refer to the Taxable Total Profits TTP and Computation of corporation tax guidance notes For those companies making a claim for the research and development expenditure credit RDEC the gross RDEC credit is included in the company s computation of taxable profits This will increase the corporation tax liability which in turn affects the estimate of quarterly instalments The

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