Payment of corporation tax

By Tolley

The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Payment of corporation tax
  • Normal due date
  • Quarterly instalment payments
  • Security deposits
  • Making payment
  • No corporation tax payment due

Normal due date

Most companies are required to pay all of their corporation tax nine months and one day after the end of the chargeable accounting period. For example, where a chargeable accounting period ends on 31 December 2016, the due and payable date for corporation tax is 1 October 2017.

If a company’s accounting period is more than 12 months long, then the period is split into two periods for the purpose of calculating the tax payable. The first period will be the first 12 months and the second period is the balance.

See Example 1.

Quarterly instalment payments

Large and very large companies are required to pay their tax by instalments.

Large companies are defined as those which have profits in excess of £1,500,000 and very large companies as those which have profits in excess of £20,000,000. Profits include not only trading profits but also ATED-related and NRCGT gains where these are subject to capital gains tax. In addition though, a company is not a large or a very large company if its total liability for that period is not more than £10,000.

SI 1998/3175, reg 3

The profits / liability figures used to determine whether a company is large or not are adjusted for short chargeable accounting periods and any related 51% companies. See Example 2.

If a company is not large or very large, payment is due nine months and one day after the chargeable accounting period as mentioned above.

Detailed guidance on quarterly instalment payments is in the Corporate Tax module, see the QIPs ― when do they apply? guidance note (subscription sensitive) for further information. For further information on ATED-related and NRCGT gains, see the Overview of the ATED regime and Overview of the rules on disposals of interests in UK land by non-residents guidance notes

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