Payment of corporation tax

By Tolley in association with Jackie Barker of Wells Associates

The following Corporation Tax guidance note by Tolley in association with Jackie Barker of Wells Associates provides comprehensive and up to date tax information covering:

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

Normal due date

Small companies (including marginal relief 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 2018, the due and payable date for corporation tax is 1 October 2019.

If a company’s accounting period is more than 12 months long, the period is split into two 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 companies and ― for accounting periods beginning on or after 1 April 2019 ― very large companies are required to pay their tax by instalments.

Large companies are defined as those with ‘augmented profits’ in excess of £1,500,000 and very large companies as those with augmented profits in excess of £20,000,000. ‘Augmented profits’ include taxable profits plus franked investment income. Franked investment income comprises dividends plus a one-ninth tax credit but Finance Act 2016 removes the need to gross up the dividend with effect from 6 April 2016.

SI 1998/3175, reg 3

For accounting periods ending on or after 1 April 2015, augmented profits additionally include annual tax on enveloped dwellings (ATED) related and non-residents CGT (NRCGT) gains where these are subject to capital gains tax (which may be relevant for disposals made prior to 6 April 2019).

Augmented profits are adjusted for short chargeable accounting periods and associated companies (51% group companies from 1 April 2015).

For additional information on quarterly instalment payments, see the QIPs ― when do they apply? and Calculating QIPs guidance notes. For further information on ATED-related and NRCGT gains, see the Overview of the ATED regime and Overview of the

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